what many of you fail to understand is that there are many styles to make money in the market. there is no best way. which is best depends more on your temperament than anything else. some guys freak at a 1 tick loss. others think nothing of averaging down. both can win. the point is that the blanket statement that"you should never add to a loser"is wrong.
It would freak me out to add to a news engendered ripping trend fade but adding to losing positions in some RTM strats is not unusual if there is no wack news, aberrant volume or anything other than "business as usual" for that stock/spread.
There is one best way. All of the wizards in Market Wizards (the first book) use that method. That is the right way to make and keep money. It's also the most comfortable way. It is hardest to learn and it takes a lot of practices to perfect the method. The wrong way, which is adding to losers, will allow you to make money, but you will have a hard time keeping them. You might lose more than what you have due to desperation. It is the most uncomfortable way to trade, yet it is the easiest to learn and practice. Adding to loser or averaging down is the wrong way to trade. It could mess up someone, their friends, and their relatives' lives. It take a real psycho to suggest this method to others. PA Professional Newbie
Totally wrong, fear mongering. Discipline and position sizing is the key. Averaging in works, if you do it correctly. Reason being, no one can time 100% and the market is an undulating system. by the way, stops hurt performance too. Bet that freaks you out! TINS
I should be asking you this question. You have been in ET for a decade and it seems like you didn't even learn from what happen to those who average down. Judging from the article you posted, you can't even tell if someone is telling the truth or not. Also, from looking at the forums you mostly post in, I could tell you are still searching for the right method or some form of confirmation. Let me tell you this, the ones who trade the right way don't seek confirmation anymore. BTW: I am a newbie and I openly tell people this because I could care less about convincing someone to trade the right way. All I want is to prevent people from messing up their lives.
The key is "if you do it correctly". We are human are mistakes are bound to happen. I would rather trade in a way where mistakes does minimal damage. BTW: I hope you really are not marketsurfer, because he hang out with someone whom I respect, and I don't want to get into an argument with him.
what the hell are you even doing giving advice when you dont trade. you should be in the mouth shut ears open mode until you have a clue what you are talking about. i swear we need an age limit on this site.