Yes, just ask and look at posts, by some of us on ET and you would think Al Brooks is the biggest scam artist in day trading.
MY PHILOSOPHY: Trading has to fit our personality, or we will become disillusioned be unhappy and miserable. You can make money but still be miserable. An extreme example would be being a garbage man in Honduras. The garbage collectors would ride down the road in a dump truck in the back of the truck on top of the garbage in the dump section of the truck stopping to pick up people's pile of garbage that they had put on the side of the road. It was a stinky miserable task. The poor collectors sit on top of that stinking garbage. To be sure they made their pay (whatever that was.) I don't think I could have done that job even though I was offered good money. Even with a good salary I would be most miserable. Money is not everything. We also have to have some measure of pleasure and satisfaction and be able to have happiness in what we do. And to have zest in life we have to be somewhat passionate about what we do. Without passion we won't last for the long haul. I have always hated losing. At anything. Monoply, checkers, volleyball, horse raising, motorcycle raising...you name it. I cannot tolerate a loser and I will never tolerate myself losing (although I do lose). I detest it. I must find ways to win enough times that overcome my displeasure for when I lose and that over the long haul keep me passionate about what I am doing. Hence in the trading world it seemed like scalping was a concept tailor made for this ole boy. I know I have to accept losing sometimes but I don't have to like it. Nor embrace it and hug it and love it. I prefer to kick it in the ass every chance I get. So, I devise ways to trade that give me a high win rate and that get me back my losses QUICKLY when I do have to accept them. I may have to accept them but I have no interest in them being my friend and nor my continual companion. I simply will not and cannot embrace losses. I refuse to do so. That is why a low win rate psychologically is too destructive for myself and my ego. I simply cannot deal with it. I will go to something I can win at. If I am out of sync with what the market is doing on a particular day I will just quit and go do something else. I am not going to throw good money after bad simply because I am not mentally in sync with the market, and I am making too many mistakes and none of my techniques seem to be working. And occasionally I do have a day like that. I cannot and will not tolerate 5 or 6 losses in a row. I cannot tolerate a big draw down unless I am intentionally using a technique such as "whittling down" (and not every big DD context is conducive to whittling down) to gradually whittle that loss down. If I have to take a loss on an averaged down position, reverse double or triple up to get back my loss very quickly and if that fails then I may double down once or twice more and if that fails time to go fishing, gardening, watching TV, washing the motorhome or to a bookstore in town and sip on hot chocolate while reading a book. If a trader can't stomach big DDs nor low win rate then he will have to find ways to trade that that fit him/her as a person and that are not psychologically damaging to his/her ego and that kills his/her passion for trading. Scalping can mean high win rate (once one learns how to do it and practices enough). It also can give a decent R:R if calculating off "actual" risk as opposed to initial risks. My initial risks are basically just catastrophic risks based off some swing high or swing low and I will continually move them around depending on what price is doing and how it is doing whatever it is doing. My profit targets are also moveable and based upon what the market is doing and how it is doing it. Because they are dynamic and moveable I can never calculate my R:R before hand. I can only do it after the trade is done and THEN and only then can I monitor IF how I am trading is in fact producing me a decent actual R:R. See I use "actual risks" and "actual PT" in calculating my R:R. I have no desire to use an imaginary initial R:R hence because I believe the market to be dynamic and all the variables that affect that dynamic as being unknowable by me so for me it is total B.S. to attempt to impose on the market a R:R before I have even taken a trade. However, I am very interested in my "actual" R:R AFTER the trade is completed because it does, over time, tell me something about my techniques. I reject trading with a fixed SL and PT simply because I cannot ever know all the variables that will cause price to move wherever it moves and however (whatever momentum) it moves there. I know that is breaking with a cardinal rule of trading "never move your SLs" but to be honest not being willing to move my SLs or PT to me means I am dictating to the market that is must do so and so or else. It is a sort of an ultimatum I am giving to the market, and I don't suspect it senses any inclination to obey whatever it is I would attempt to dictate for it to do. One thing I understand clearly is that the market is dynamic and that it simply going to do whatever it does without any concern for me. It is not interested in me, nor does my trading affect it unless I am trading institutional size. Do you ever see me trading institutional size? NEVER. I always prefer trading small and building unless I aim to get a trading cash pot up at the beginning of the session to play with during the rest of the session. I get mocked at for trading small size sometimes. I simply don't care. I may start small but I try to build intentionally and with purpose not randomly and out of emotion. A trader may have a choice. He can trade size or he can trade small size. I am interested in watching my risks. I know I can sometimes read PA wrong and if I happened to read it wrong and have big size on and have to take a huge loss then not only may my account days be numbered but then I have to deal with a very angry woman and that is no satisfaction. Men walk where angels fear to tread. Nothing much like a woman's wrath. It can be disconcerting. I have learned I don't have to go in big. I can start with small size and build as the market dynamic plays out. I can average up or scale up. I can scale in or average down. I can double up or triple up. I can whittle down. I can trade a myriad of price patterns. I am not limited by one pattern or setup, nor do I have to wait all session long for a specific setup and pattern to appear. I can trade most any bar. I have in my toolbox enough of tools to trade most any pattern the market gives and if a particular TF doesn't show one of those patterns I can go to another instrument or another TF on the same instrument and usually find a tradeable pattern. I have also learned that almost any bar on any chart of any TF at any time of the day there exists an intrinsic potential to render a profit. Hence, I use PA in a BAR BY BAR analysis. And I don't mean a pub crawl LOL! Money can be made or lost on most any bar, in any TF, on any instrument. Period. So, why would I sit my ass around for hours waiting for some jackass guru setup (even a valid setup such as a BO as they only appear 10% of the time and strongly 5% of the time in a session) to appear for hours when I can be trading on most any bar Pennants..PBs...flags..trend..BOs ...triangles (symmetric, ascending, descending, expanding) ..wedges..TR..MTR..SPBL..SPBR....etc FOT is built-in to my personality and fits my style and gives me satisfaction. And better yet the market, on any day, any TF, renders FOT IF I have a myriad of tools and the skills to employ them. Others may want to sit and whittle their thumbs away while they wait for a setup. They might as well be doing sit-ups while waiting for a setup. LOL No sir I will take scalping ANYDAY over SWING TRADING or POSITION trading. The profit potential is much much greater (remember J.M. Hurst). Why do HFTs exist or even attempt HFT? Maybe they know something. Think about it! Finally, the market doesn't know me nor cares about me nor is it out to get me. Even though at times it may look like it is. It REALLY is not. It is only doing what the institutions are doing as they are trying to take money from each other. I am a tiny tiny termite. I mean absolutely zero to them. Therefore, I dispense with manipulation..blaming the FED...stop running or any other excuses I may dream up for my failures. I prefer to focus on reading correctly what they are doing as they are taking money from each other and keep my stop losses far enough out of their reach as they do battle take money from each other. We do know don't we that there are bullish and bearish institutions and sometimes they win and sometimes they lose? If they lose too much too often, they will soon disappear from the trading scene. The chart shows me what they are doing. They cannot hide it. I may sometimes read it wrong but that is on me. WHATEVER they do to push price around shows up on the chart. If I cannot trade PA successfully then I am not just yet good enough. I need more practice. Sorry for such a long post but there you now have the lowdown on my trading philosophy. "I really do create my own reality in trading" That is my motto. I accept the responsibility. To this day I practice a lot. I try to keep my skills sharp. I can only achieve that by continual practice, self evaluation, and analysis. I am getting old.
David Lynch RIP. Just to let you know, averaging down saved me today. Would have been a losing day if not for averaged down. Do I get an A professor? Hard on my stomach though.
Good Morning ironchef, Great job buddy. I perfectly understand!!!! You got an A. What you do you think @volpri , does @ironchef get an A?
When I get a chance I will try to show a way to take quick scalps with less risks. I'm real busy next few days so not sure when I will get around to it.
I figured out that context and conviction are critical if I want to average down. In a TR it is quite safe and a good way to improve profitability. Still I am not comfortable with it and will only do it for fun.