What do you do when a trade keeps going against you? It seems that you have a plan where when the trade moves against you a certain amount you add to the trade. If the trade keeps moving against you do you attempt to scalp your way out? Do you reach a point where you just give up and take the loss or do you turn the trade into a long-term investment? (Hard to do with futures.) If you do the above do you know in advance when youâll throw in the towel?
I keep adding to it on predetermined intervals until the trade is no longer valid. I also keep a 911 stop in case the move against me is fast and loaded. ESD
PUT A STOP IN. IF YOU DON'T KNOW HOW DON'T TRADE. Seriously, there are levels the market just shouldn't move. If it does and wick....get back in (more conviction for the move) But under no circumstances should you not have a stop. Just plain stupid.
How do you know a trade is invalid? Does it hit your stop? Does it go against you to a certain point and not come back? When a trade goes against you why aren't you exiting and then re-entering at a better price? Do you add to a trade when it goes in your favor? Explain what a 911 stop is. Is it placed with the broker or do you keep it in your head?
Stops are just a tool which in the RIGHT HANDS can boost overall performance. They are a way to help a trader manage risk. Managing your risk statically is not good enough when you consider that the markets are dynamic. Just my opinion.