LOL. Yes it can cause sweaty palms and heart racing until it becomes second nature! It is based on the market probing. Whittling down is not just averaging down. I will average down but if I don't get a profit pretty quick and instead the market moves against my averaged down position then I will swap to whittling. Or just get ut completely and double up in the proper direction. Whittling down is a technique to recapture paper losses while along the way picking up profits. That said I prefer just averaging down 2 or 3 times and getting out quickly with a profit on the averaged down position. But that doesn't always happen, so I needed a technique to mitigate the paper loss on the averaged down technique that did not work. That is also why I want to start small size especially if I am showing the technique. But the idea is the same as even if I start with 20 contracts on the initial entry then add a 20 averaged down followed by swapping to whittling down by 40cs each time. On ES NQ or MES and MNQ. The size is only contingent on account size and taste for risk, and preferred trading instrument. I generally show all techniques with small size. There is no point in doing this with large size to show the techniques of how I trade. I could but why do I need to do that?
IMHO (and in my experience), doubling down increases your win rate *less* than doubling up increases your expectancy. It's a bit a matter of whether you want to be "right" more often or make more money. Again, imho and in my experience, to each his own.
Last trade of the day (on your chart): Shorted around ~9:03, shorted again ~9:10 (doubled), ~9:15 (doubled again). Exited ~9:25, called it a day.
You are correct in it resulting win rate "less" but only if it is done under the wrong context and used with no strategy or technique to mitigate it when it does go against one's position. I am speaking in terms of scalping. It is a scalping technique. Look at today's chart I posted. I averaged down on initial entries (same size) bars 8:49 and 8:50. It went against me. I didn't dump it but mitigated the paper loss by swapping to whittling down the loss and eventually both of those entries each themselves rendered me a profit as the market probed back up. And had it not probed back enough to give me a profit I could have gone flat (losing on that 8:49 and 8:50 entries) and still came out with a profit because of whittling and doubling and tripling size as I whittled grabbing small moves as they moved in my whittling direction. You might find it interesting to study the chart. From 8:42 to 9:14 every single trade was a winner. I really only endured much of a drawdown on only long entries made on 8:49 and 8:50. They were simply paper losses until the probe back rendered them as winners. I repeat again ALL the trades on the chart ended as winners. Note every single trade on that chart were long entries. Green is entry and orange or brown are the exits. No shorting at all on this chart. Why? Because I resorted to whittling down.
Are you saying you practiced on a 1m chart on MNQ? Did you end up with a profit on last two entries? Enough to exit the three entries with an overall profit by 9:25 even if losing on 9:03 entry?
Good Morning Volpri, How it goes buddy? Sorry been busy on NQ this morning, trying to get it. Very Well stated, I shorted that BO, but I stayed in made some money. But if it had kept going up, I would have exit and went long as well. Questions please: 1. When you say "double up", what does that mean? Sorry. Does that mean, if you have averaged in 4 times/contracts short, and you decide to take your loss, you exit the 4 contracts short, and go 8 contracts long? Thank you sir.
Good Morning Picaso, I rather be right all the time and everyday. I will do anything on the planet in trading to win everyday and not be in drawdown forever.