Good Morning Volpri, I just wanted to say you are very smart and I appreciate your videos and teachings. Very helpful. Please make more videos. Thank you
Good Morning Volpri, Can you please provide an example of this comment? I am bit confused on this statement "Traders go into averaging down to void a loss".
I am frying shrimp and a Brazilian cut of beef on the grill today so maybe later I can give a better explanation. In short, the purpose of averaging down is not to avoid a loss but to put probability in my favor to get out with a profit because of market probes. It is extremely difficult to get precise entries at just the right time. So, averaging down makes up for that and can render a profitable trade because the average down trade makes the profit and the initial entry gets out at break even, a small loss, or many times even a profit. That said, the end result is that the OVERALL trade does in fact avoid a loss and the trade overall ends up with a profit. But the purpose of averaging down isn't to avoid a loss but to put probability in one's favor that the overall trade will end up an overall profit. It sounds like double talk but there is a difference. A good averaging down action first looks again at the larger and immediate context to make sure averaging down be in fact putting probability in one's favor. However, averaging down JUST to avoid a loss is not a good strategy because one can keep doing it from emotions until the pain gets so bad that one exits with a large loss or decimates their account. Averaging down must be a calculated move based on reason and momentum and not emotions. Whittling down I know looks like averaging down but it is based on another premise so don't confuse whittling down with averaging down. Will try to show some examples later. Volpri
I agree, and when done correctly it is just like a capacitor in an electronic circuit, damping the impulses and spikes in voltage and current so the delicate downstream parts can function. In the case of traders, it's free energy we can capture. Some bankers have a yuuge capacitor in their account, and others do what they can afford. But when that sucker blows, it's permanent.
Because he is not posting a real journal. Duh? It is so easy to figure out, a caveman can see it. Oi!
I want to defend @volpri. There are two ways to view this journal: 1. Track his performance, preferably live trades, use that as a judge of validity. 2. Track his approach and methodology, see if that could be duplicated, use that as a judge of validity. It is the scientific approach fundamental to all science/medical research. I have not done #1 but have done #2. I can tell you that based on my 6 months of paper trades and now two weeks of live trades, his general approach is sound and valid. You should try the same and see if that could help make your day trading profitable. Happy new year to you.