Rezo It appears Victor's averaging approach fundamentally cannot allow any pre-defined stop-loss target. Maybe Victor should consider to reduce (rather than increase) his lot size for now.
Indeed, adding to loosing position is against any rules, though many even institutional traders use this technique - but they only add once, and on both entries (first and the added) - stop is inevitably put. Sometimes its not a bad approach, though for me personably its a "no way" option. On market, defining the possible loss is one of rules trader MUST use in order to survive. I know there are no recipes for successful trading, but several rules are MUST DO. Stop is part of risk management, and it should be applied without exceptions. Very occasionally I interrupt in my initial stop order - and only in case I want to cut losses. Otherwise, if trade goes against me, stop order is the one to close the trade, not me. Risk reward ratio is also good instrument to be used in order to keep trading as safe as possible. For ex, I risk in average 2% per trade, and don't trade in case I see possible target is less than 2 times as much as possible loss (stop). This prevented me last month to get in red: I had 6 loosing trades (one of them was -144 pips ! ), but 4 wining trades took me to green, and eventually I ended up with 75 pip in green. that's why targets should be at least twice as much as defined stop. Otherwise - no trade, even if it looks very good.There is no trader who will say he didn't have several stops in raw in his career - stops are part of this biz... sorry for such long post. Regards, Rezo.
Only place I've seen adding to a loser work is arbing a spread (stock, future, currency, whatever) with the goal of it reverting to the mean. But the adding is done as part of the plan and, like you said, the overall position still has a stop. Fifteen years ago I had a friend, Phil, who thought he had a sure-fire way to beat Vegas. He went out there on vacation and tried to "double-down" (martingale I think is the term) his losers at the blackjack table. I forget how far down he got at one point, but 1) it was a LOT farther then he ever thought he'd be down, and 2) his next bet, if he lost the current one, was going to be beyond the table limit. Luckily he won that bet and had the good sense to quit at b/e and review his "plan". To my knowledge Phil's never tried it again.
It's been a hard hit ... my shoes are on fire ... But in the end ... it's MY way or the HIGH way ... You wouldn't like to be in my shoes, you don't imagine what have I got into .... Ok...the account is looking bad, I had no posts as I had to open another account and hedge .... I've got my self in this all over ... My head is exploding, lots are flying all arround .... but it all seems to make a little sense now ... I think I managed to put it all together ... So .... finally, what you were expecting for .... My account now is short not less than <b>23 lots</b>... average price 1.1424 .... hedging stopped 1.1486 ... now waiting for a retracement on this account ... Don't worry guys I'm not the kind to run away and not admitting I've done some BS ... In the end, I'm here for the same reason you are ... exchange ideeas, experience and improve my skills .... I'm pretty curious about how this will end ... I'm confident anyway ... Good luck, thanks for your posts and advice
Well you may pull it off, I see some fair bit of resistance at 1.1520 off the 50% fib from the recent bear run if you can hold out that far, and I think after todays rally will deff have a bit of pullback. Man think I would have fainted!!
Victor, first of all, we all have been in those shoes(at least I belive those who started by their own). Thats the reason me, and others warning you couple days ago that this is not the way to trade - thst is if you want to inprove your skills. So - all the lots flying around - I know what it it, but last time I saw those flying lots was 4 years ago. And that was enough for me. Good Luck, Victor. Rezo.
thanks guys ... pray for me wow ... my broker seems to be upset, I can not log in my account ... this is cool .... so .... people out there ..... KEEEEP SELIIIIING EUROOOOO ... thanks
Please explain to me why a well capitalized trader, who for whatever reason has found himself averaged down and losing, should close and take the loss in a non-trending (away from him) market. Geo. PS: When I say "for whatever reason", I mean it. Don't waste my time with any rules about avoiding it in the first instance. This is a damage control question. If you have to, assume that you were handed a losing part of say a much larger trade a firm had put on and told to work it to successful resolution or you're fired.
Think I'l get to sleep now, my broker finaly let me take a last peek at my masterpiece ... I'll go and try to close my eyes.... I have a mountain of papers to review tomorow and a meeting with a lady from the national bank .... I will only be thinking eurusd .... Slavery is what market comes to sometimes.