the entire probability of your trade rests in a mkt retracement to cover enough above the average and you exit so instead of trading for profit or un profit you are always ckawing your way out of a loss.
The double or triple up is in the new direction. Not the same direction as my averaged down entries. Not sure if you understood that. That is I would double or triple up in the opposite direction AFTER exiting all my averaged down contracts with a loss, once my premise is proven wrong. I learned years ago from George Angell who learned it from another trader just how to get back a loss when a trader finds himself on the wrong side. Exit. Reverse his position and double or triple up in the reversed direction position. Price only has to move a short distance and one is at BE. A little more and one is back in the money. Often in minutes and sometimes just seconds. So, once my premise has proven out wrong I am out. And I go in the correct direction. I just judged the market wrong. Intraday trading requires alot of flexibility to the react to the dynamics of market action and not just some set system for entries and exits. I understand traders want straightforward, easy to decide binary systems but unfortunately, at least for myself, I, as a price action trader/scalper, cannot find KISS to be viable in the long run. I need to constantly ask myself on each bar what just happened and what is likely to happen next? Who controlled this bar the bears or bulls? What is the immediate context and the larger context in which this bar takes place? Is the trade conducive to averaging down techniques? Or should I just exit with a loss and enter again at a better position much like you describe above. Sometimes I do that. Other times I average down. Other times I just hold my original entry through any drawn down W/O adding any to the position if I think there is a good chance that price will bounce back before the session close. I am more apt to do as you suggest if we are in the afternoon and getting close to the close and I figure there won’t be enough time for the trade to bounce back and give me a profit. I sometimes do as you say above at times, but not always. If price is in what I call a grinding Small Pullback Bull Trend (SPBL) I prefer to average down over and over on PB’s to the 20 Ema and exiting with multiple profits. We just have not discussed all the ways I trade in this thread hence we had not talked about your concepts above. The fact is you could still end up doing what you say and find yourself on the wrong side of the market over and over and you wouldn’t be just holding paper losses but actually enduring loss after loss until you hit it right. Like the slot machine! At least with averaging down they are only paper losses until you JUST have to get out cause the premise is wrong. See by averaging down I am not losing my position ( as turkey would say in the Livermore book) “if I exit I lose my position”. To contrary I am building my position and getting a better position And doings so at better prices, and if I know my stuff, price has a good probability of giving me a bounce that will allow me to get out of all my contracts with a profit. That is why it looks like magic as Fedex says. But if time is running out I will employ what you are talking about. I do understand that with averaging down that the paper losses are growing on EACH position as price moves against me whereas doing what you say I am taking an actual loss but stopping that particular entry from growing into a bigger loss. But then I am taking multiple losses whereas IF price bounces back on my averaged down position I have zero losses. So there are pros and cons to each scenario.
I don’t see it that way. I see it as building a better position at better prices as long as my premise is holding true.
Why am I still typing these explanations? Anyway, it was good the discussion. In the end each trader has to do whatever floats their boat. See you guys later.
lets be very clear here. i dont view anything about what you are doing as magic. quite the contrary and taking an actual small loss versus holding a larger and larger growing paper loss on day trades is actually a better choice up until you are moving so much size that your slippage over rides the loss savings from just holding amd this would be the only reason to hold losses like so many funds do all the time. they arent nimble enough due to size but 10 30 30 50 you can easily get in n out cheaper than holding amd adding to a loser. the biggest risk is that mkt spikes with you not in it as you wait for a rebuy. but there are ways to mitigate this risk. the idea that your building a position and going to exit with a scalp profit sounds silly. if you are taking that kind of paper risk you would need to get paid a lot more than a little above break even. i mean whats the point and the idea of reversing isnt meant to be after exiting an average down huge loss!! anyway. if its works for you great but you xan easily do the math with slippage and see that methodical adding of contracts and cutting lossed always makes you more money with less risk up until size is so large it ruins your average amd slippage is so high so their is a ceiling on doing it this way. with enormous size you must hold thru the paper loss because u cant sell and reneter it just doesnt work any more but i seriously doubt you are at that level of play being on et
your slot machine idea made no sense at all because you are still playing the slot machine also and im in the trade also just like u. im sitting out but im re entering also. the biggest difference is that in the end i double what you make and we both have the same premis. when its wrong for you its wrong for me. when utsvrigh for you its right for me. the difference is that when so wrong the trade is done. that exiting n renetering saves money on the loss and gains money on the win. because the entire amount are making money at a much lower average price and yet your paper losses are being wotked off as im already in paper gains. your paper losses become my paper gains not to mention the fact that the more i lose and sell when long..the more someone else is buying so guess what. im helping my premis by getting others long while im getting long even lower and that is why ny strat will outperform yours over and over again.
u forgetting u need a setup to enter again in your system? Whilst volpre is playing his setup. seems u are taking a loss then entering on no setup? and if you hit it right finally u have to get back those losses before u get in profit. so what if volpre averaged down on increasingcsize as u are going back in on increasing size so if moves in his direction he out performs u greatly because his accumulated position keeps making him more $ as it moves in his direction while u are all in after several losses in a row and have to recoup actual losses b4 u make profit. His position size recoups Paper losses And continues till he exits. In effect he ends up with a bigger position than u and it moves i. His favor..so once both are even in getting back losses he has bigger postion to go into profit than u do.
Wrong on so many levels. im playing his exact strategy and we have the same number of contracts always. the dufference is im cutting losses he isnt paper losses are still losses! im realizing my paper loss sooner so i can get in a minute later saving 1 point on possibly 3 positions which would be 150 dollars! remember volpri is always carrying his max position and it only grows as he loses more. my average price in the end will always be lower than his because of my exit n lower renter. now slippage n fees sure those must be accounted for but my risk is way less because when i bail for good. ive already saved a lot by realizing my losses. whereas he didnt so he gets the total loss and i get my savings minus fees n slippage.