Is this true? Are you averaging in on a whim? Well if you have infinite capital and SPY doesn't go to 0, you win
So no problems really. I gorged myself on the payroll report this morning (woohoo!) normal long target trading) and the wife tells me the party I thought was at her mom's place is actually here tomorrow. So I may have to finish this another day.
Averaging in is perfectly normal, in the sense of 1st, 2nd entries (maybe 3rd). It really depends on the situation but you raise a good point relating to what I'm illustrating here to my friend. In the chart in the following post (yesterday trades), the area in the blue box is a classic for a 1st and 2nd position. The thicker red line below represents strong support and a good place for a 2nd entry, we can see in this case the prior and more recent support (dashed line) had broken. There are things relative beginners/small accounts should not do which are perfectly fine for those with years under their belt know when conditions are ok for granting leeway.
Yesterday's (Thursday) chart. About 22/22 winning round trip trades. All but two hit target within their 5 minute bar, usually 5 to 60 seconds. One spanned another bar as the trade was entered near previous bar close but was over in a minute or so. The errant trade (in the blue box) hit target but was a slight cock up. I entered the trade and was just adding my target when my wife shouted for something seeming very urgent. I did not get the target manually positioned fast enough and missed the exit. I guess I should have been using an ATM to place the target two ticks away. I'll set an ATM template for the next day maybe. I moved my emergency stop down below the major support line (thicker red) while I was talking to her as my mind was distracted, unsure for the purpose of this experiment if I should close or go with a 2nd entry. NQ, Thursday Dec 5th, 5 min bars. I'm not sure if I need to go on, I've certainly proved that (accommodating for the distraction affected trade) this is not a coin toss as my friend was insisting. So yes you can scalp charts, you can make a living but for experienced traders this is a lot of effort for reward perhaps vs longer target trading. That said, not sitting at the screen all day and doing as I was doing, wandering in and out of the room, grabbing trades got a win ratio that surprised me. Fresh mind = good decisions.
I believe for most, averaging down is very bad activity to add to one's trading. But for the few who add this "risk management" technique, they generally have spent years perfecting in the models they trade or for automation. I stopped long ago or trying to find perfect entries, and often times whether scalping or very long term commodities, original entries are too early. The greatest risk is scalping/day trading but any longer term timeframes get hedged. As far as trade war, scalping in trades for under 3 minutes/day trades happen when percentage of scalping never get stopped out, so like 0-4 per day, trade with trend and making own luck to be able to stay in trade.
Trust me on this. Everyone here will get lucky on averaging down. Until they do not, and blow their account. I did it again myself on the micros this week. Very risky! Without impeccable timing, it is a doomed strategy until the trade war is resolved.
your wife screaming something urgent and you listening while scalping is number one stupid and number 2 absolutely stupid. scalping requires a concentration and repetitveness few can handle for more than a few hours. break then more hours. scalping is the main reason algos were built because it is a ton of mental work and repetitive task must still be thought out.
is it true you never looked at historical chart with a long term over 100 years positive slope!! zero..ok pal. hoe scared of the mkt are you. its there a river of money and energy just waiting for to participate as a winner or loser