what i am trying to say is that while volpri manages the change of market conditions, i have learnt to recognise it..... because it does not happen in an instance or on a dime...it is possible...but you must have a desire to do that.....
i was trying to say that there is another way to do this...from the way volpri is outlining.... a more difficult way ....that takes some doing but it is 100 times more lucrative.... that is why i chose that route
At what point do you determine (within yourself) that an overextention of the top (or bottom) of the range of the BO you are fading is not a fake out but an actual BO? 1-2% over? Do you keep averaging in on these fake outs to increase your profits or do you wait for it to reign back into the range in the meantime?
i thank you i followed your advice not to trade counter trend .......and it was worth a lot...about 20k usd and counting...you should patent your advice edit and if i remember correctly you were very persistent with it...posted it 3-4 times.....you stayed in my face till i realised how stupid it was to go counter trend.....and expensive too....and unnecessary when you can trade in hindsight after the trend change happens....and that is also the time the market moves...the infamous 3 wave of elliot damn nice of you to take the trouble.you must love me very much....i love you too
A trade took place today in the ES that illustrates some guiding principles for me on averaging into a losing position or perhaps better said averaging down. This is a 15 minute chart. Keep in mind I am a scalper. I will be flat by the end of RTH. I usually take quite a number of trades during the RTH. This is one of those trades today 6-24-2019. I am not showing some other trades in the channel but let it be enough just to say by the time I took this trade I had already taken profitable trades. This trade gives me a chance to explain some guiding principles for me as I add to a losing position. First understand I don’t just randomly add to a losing position. The context has to be right. In this case the market had been six 15 min bars into a tight bear channel. Two of those bars were pretty large bear bar in succession. (Not shown but to the left in the channel). So, larger context since the open is bearish. Favors more move down. The more immediate context is a bearish tight channel. Favors more move south. Bars in the channel indicate weakness. Favors more move south. Price is staying much of the time in the tight channel below the 20 EMA. That too favors more move south. My first entry is one contract SHORTED on the 6th bar in the channel. That is a doji bar not particularly bullish..LOL. Favors more move south. In general everything points to a chance to average down. Now I know odds favor I will have a profitable trade if I ONLY short this tight bear channel. Not the same odds if I try going long. In addition, see time is also on my side. As long as the channel stays bearish as time progresses I am just making profit on any position I have. So, my first entry is one contract IN THE TOP 1/3 of the channel. This is important. I want to start shorting in that top 1/3. So it moves against me after my first entry and breaks above the top channel line. So, you asked what is the percentage I will let it move against me and keep adding to the losing position. Well I don’t really go by percentage. In general, I like to take the middle of the range on the bar of first entry and extrapolate that upwards from the top of the channel. See the horizontal blue lines. This upper space is where I will keep adding to a loser IF the general conditions favor that tactic and they do as explained above. So, in this space i will add as often as I will and feel giddy enough to do so. In this case I only added one more contract and decided to wait it out. Sometimes I will add multiple contracts in a second trade if feeling real frisky. Price is going down. Channel is tight. Overlapping bars. BO going nowhere. Subsequent price action after entries staying below the EMA. More bear bars than bull bars after shorting. Bigger bear bars than bull bars after entries. All things favor that time is on my side. Just ride it down. Even if it doesn’t trade back into the channel the angle of the channel is such that just holding as time goes by I will be adding profits to both entries. No reason to jump ship. Except one. I had errands to do and decided around 12:30 I had to just take my profits and leave. So I did. Made 2.5 points on one contract and 3.5 on the other. Or $300.00 before commissions. As it turned out it just kept that basic angle going down and down till around 14:45. So I missed out on all that. See, when the context is good averaging down is actually a sort of leverage for profits. Chances are price will go back into the channel to, at least the middle of the channel. Which it almost did two bars after my second entry. I could have exited then and there and made profit on both entries but conditions favored just holding for even more profit. The “angle factor” and the TIME factor were in my favor to just hold. Two more times it dipped down into the range. The last one being right after my exiting the two contracts. But, I left. Errands to do. Another thing to understand. In a bear tight channel any one BO out of the top of it has 75% chance of failing. That too is good odds to add to the tight bear channel odds, and the larger context odds, and the odds that time was gonna work in my favor even IF price never made it back into the channel. In fact my exit was out of the channel! Now if I am feeling really good, clear thinking, and am in a risky mood I will even give myself more space to average down in. That is, I will take the entire channel size and extrapolate that amount above the top channel line at my first entry bar. That is abit more risky as once price goes a channel width above the channel then odds begin to favor that the 25% successful BO scenario may be happening and not the 75% BO failure. Said another way the least likely scenario is happening especially IF all subsequent PB’s are holding above the BO point of the channel. Most likely in a case like that if I have averaged in and price is now having a successful BO out of the top of the channel and all PB’s are staying above that BO point then I am probably going to dump my position. Take the loss then on a good signal bar DOUBLE or TRIPLE up and go in the new BO direction looking for a measured move (and probably two legs) up. The MM’s will consist of 1st leg being from the BO of the channel and channel width up TO MY new long entry With that same distance up after any PB’s. This second move up is the the 2nd leg up. So, in the second leg I make my losses back and back in profit again. A larger measured move can also extrapolated up the distance from the bottom of the channel to my long entries after taking my losses and extrapolate that same distance up above my entry or any PB’s which is basically two channel widths above my long entry which in turn is one channel width above the top of the channel. Bottom line: if conditions are right averaging down into a losing position can most definitely leverage the profit factor and turn what appears to be a losing trade into a winning trade. And I don’t care what the guru’s say when they spout out averaging down is a losing proposition. They just don’t know HOW to do it and WHEN to do it nor HOW to mitigate the losses when the market does the unexpected AND get back, not only the loss, but very soon be right back into profit again. Takes guts? Yes. Takes discipline? yes. Takes knowledge? yes. Takes decisiveness? Yes. Takes strategy and tactics? Yes. Can it be done? Yes. I just showed you! Now may the gurus come forth with their venom. I shall ROF and LMAO. PS I am getting old and a diabetic too so some days I am not in a good frame of mind to be a huckleberry for averaging down. At such unfortunate times just best to trade other tactics. There are many. Almost every bar offers profits if one has a tactic to squeeze it out if the bar. That is hilarious. Sitting around waiting hours for a good setup and every 15 minutes a trader is handed at least one opportunity (if trading 15 min TF). PS I also had over another 300 in profit before comm....trading the previous 5 bars in the channel (that are not in this image here. Used other tactics. But this image illustrates and I hope answers any questions you may have. If you don’t like it just toss it in the garbage can of useless information. Won’t bother me. And nine_ender will be very happy as he apparently detests my posts. In spite of that I have good friends from Canada. Although not sure they like Mr T. I will end this rambling with MTASGA..Make Trading And Scalping Great Again. Suntrader down there in Boca Raton Fl lives close to Mr T’s mansion but won’t go see him and he also likes to wrangle with me but if I were him I might make haste and flee a city with a name like BOCA RATON. If you know any spanish well..shall I say ...it is not such an endearing name. If you desire to look at some stats concerning the trades on those 6 bars in the channel including the trade described in detail above then here they are. Most of them mean nothing to me but some traders seem to like all this stuff. I don’t care to analyze all this stuff.
Remember a channel is nothing but a tilted range. Basically what I said applies to horizontal ranges too except the time factor and the angle, which both, add additional odds to the profit probabilities. And there is a slight difference in odds of any one BO top or bottom succeeding, or failing.
love it. post your stats: Ticks modelled 5,417,622 Total net profit 264,589.74 Gross profit 335.284.04 Gross loss -70,694.30 Profit factor 4.74 Expected payoff 2.40 Absolute drawdown 53,655.76 Maximal drawdown 76,956.28 (0.08%) Relative drawdown 0.08% (76956.28) Total trades 110,143 Short positions (won %) 43,822 (77.20%) Long positions (won %) 66,321 (98.02%) Profit trades (% of total) 98,838 (89.74%) Loss trades (% of total) 11,305 (10.26%) Largest profit trade 73.58 loss trade -79.31 Average profit trade 3.39 loss trade -6.25 Maximum consecutive wins (profit in money) 107 (162.81) consecutive losses (loss in money) 29 (-360.39) Maximal consecutive profit (count of wins) 2575.74 (100) consecutive loss (count of losses) -439.52 (24) Average consecutive wins 13 consecutive losses 2