Good Morning Volpri, What is your thoughts on trading the 1 minute bars for price action scalping and price action analysis? I notice you trade the 2 minute bars alot. Thank you,
1m are ok if you are quick minded and can read PA good and make fast decisions. I am almost 70 and my cognitive functions slip like a slipping transmission. Lol Generally 2m is better for myself but on days I am feeling bright witted and spunky i will trade 1m.
Hello volpri, Thank you for the response. I will try it. You are very smart for 70, good health you have. Take care and God Bless You!!!
@volpri, this post is for you and likely my last comment regarding scalping & averaging down, your way. Another profitable live, day trading day because I averaged down! But I don't think I will continue to practice averaging down. Way too dangerous, the way I was doing it is more like a disguised martingale, kept adding to my position betting that it would be a TR and eventually it turned and I escaped with a modest profit. At one time the total paper loss exceeded my "SL" by a huge margin, since every position had a loss. In other words, I was living dangerously. I don't want to show those trades or make any more comments on them, just want to say I gain more respects, regarding your skills, after I tried them out.
You do know that you don't have to keep averaging down. If you find yourself on the wrong side when averaged down then you can just take the loss, double or triple up in the right direction, and get back the loss promptly. Try doing that on a SIM. For myself once I make my initial entry then it is one or two average down entries. I expect to be out with a profit on the same bar or within say 5 bars. If not then I make a decision to dump the positions if they have not panned out. Either I will dump them and go the other way double or tripled up OR I will resort to whittling down the losing initial position and the averaged down position by taking a same position size (sometimes double up) in the same direction (long if I was initially long) but grabbing a small profit. I do this over and over while waiting for the market to probe back enough in my direction get me out with a profit or BE on my initial entries. The keys when whittling down are four-fold. 1) context must be right 2) entries must be on a stop entry order 1 or 2 ticks past the high of the previous bar. (if initial entries were long) (if short then entry on whittling down is 1 or 2 ticks past the low of the previous bar). The stop entry orders are to ensure price is moving in the right direction for a small and quick scalp. 3) Go for quick small profits on these whittling down trades. For instance, on say the NQ 3 to 6 points. On the MNQ maybe at least I like to get 6 points. However, that can be adjusted depending on PA volatility at the time it is made. 4) FOT do this over and over until price probes back to the very original losing entries that made me decide to start whittling down in the first place. Whittling must be making profits while waiting for a bigger probe back up to the initial entries with the paper losses. It is not like I just keep averaging down and HOLDING until price gets back to my original entry. I am instead jumping in and jumping right back out locking in small profits. It sounds like you just kept averaging down adding multiple times and holding instead of locking in the profits as time goes by. Can you make one comment? Is that what you were doing? If so then yes, that would be dangerous. The secret is jumping in and out locking in profits over and over. Then when price does get back to your initial losing entries you are already way ahead. And usually if it doesn't you are ahead enough to take the loss on those initial entries and still come out to the good.
Hello ironchef, Average down because you trust the pattern, not to avoid a loss. Practice make perfect. It will take a long time to get good. But you have to enjoy the process and be patient learning the price action. I make mistakes sometimes in my PA read, but I just learn from it.
Hello volpri, Great write up. Questions: 1. How does your broker allow you to use the whittling down technique? If I try this with NinjaTrader platform, NinjaTrader will average in on the losing position automatically, it does not create a new separate order independent of my initial order I am currently losing with. Can you please how your broker allows you to use the whittle technique? Thank you,
Short answer is yes, because I picked my entries within an established TR and if I am correct, it should work. Statistically it works 80%???
Ok but what do you do when that successful BO does come? And it will come sooner or later. Markets cannot stay in a TR.
I use Sierra chart. I don't know anything about Ninja trader. Sierra chart has a last in first out matching option one can select for filling orders.