i think this has evolved into the fact that volpri has no real risk control parameters or else he would just say yeah. i risk this amount etc. but because its probably fake or after the fact hindsight on charts then you will never see true trading. he should just state real time in his journal. buy 1 buy 1 adding 3 etc all for 1 trade and we will see what happens. you could have bought 1 future anytime in the month amd held it until now and made money. Paper losses are still losses. yes they arent realized but if you realize a loss and get in at a better price then you are better positioned
@tradingismybusiness you make some good arguments. You may be right on your methodology. I will have to test that out trading live. If it pans out I may forever give up scaling in or averaging down. Now that will make ON (aka Fedex) chuckle! Some theories just don’t pan out in the real world when actually employing them. While they sound good they just can’t be pulled off for one reason or the other. Averaging down has worked for me once I figured out a way to get back any losses via doubling or tripling up once the market PA has proved my premise wrong. But I am certainly willing to attempt anything that is legal LOL So, thanks for sharing your thoughts. I will have to try it out over a period of time against another account. Since I have more than one futures account I could, in one, take trades and use my usual methods and take the same setups in the other account but cut losses and double up on re-entries as opposed to averaging down. Or I could use the same account and do your version in MES and mine in ES and at the end of the day count points made to see which worked better. Since MES and ES track together. Over a few days if your way consistently is proving out more profitable then I would be foolish to not use it. As a scalper win rate has always been a key metric for myself. But in the end I will readily agree that what is most important is $$$. Btw I am quite sure in my journal I have a chart or two showing my averaged down exits with a loss and how I got them back very quickly by doubling or tripling up. If not, then I guess I just forgot to post them. They ought to be somewhere cause I take snapshots of daily trades. However, I do admit If I average down right the odds are very favorable that I end the day profitable and with a high win rate. While I may lose on an entry or two within an averaged down trade, overall the trade is profitable. This was something Fedex could never understand so he labeled it magic. BUT if there is a more magical way of doing it I am game if for no other reason than to cause my friend Fedex to pull his hair out with all this magic going on left and right. ROFLMAO As I see it basically you are using what I use to get my losses back in an averaged down position. I exit loss then reverse direction and double or triple up. You exit loss and re-enter in the SAME direction doubling or tripling up. Now to test this out live I need some details in the mechanics of it. Lets say I start with 1 contract. At what point do I exit it with a loss? One point loss? Three point loss? At what point do I then re-enter doubling down in size with 2 contracts? And so...on....could you give me some ideas about this? Or do I just follow my method? That is when I enter 1 contract I enter 1 in your method. When I first add to my losing position I exit your losing position of 1 contract. So I am flat in your account) and now have 2 contracts in mine. So, when do I re-enter on yours with 2 contract? On my next round of averaging down i.e. my second time I averaging down after my initial entry? If so, after doing so, then in yours I have 2 contracts. In mine 3 contracts. Since you apparently have thought through these things give me some guidance so the test will be a valid comparison. Don’t forget to include when to stop buying in your account and when to stop averaging down in my account i.e. when to just hold until whatever happens. Also the SL quagmire. And when to exit with a total loss in both accounts. I know when to do so in my account and I know how to get back the loss. How do I handle getting back the loss in your account when nothing is working in your account? Just like my strategy double and reverse? Please describe the mechanics of how to pull it off trading both accounts or Instruments side by side. There to be some ground rules for a Valid test or comparison of the two methods no?
i dont know your system only you do and all i can say is you would need to look at your adds and figure out the ideal point to exit and add where you normally would albeit at a lower price amd this is what hft firms do all the time they are optimising the math in their favor based on their inventory. its all about optimisation. mkt impact is a factor. the biggest negative of my hypothetical strategy. i do not do this when i trade is that lets say you get to 12 positions on your last rebuy..mkt drops 2 points and you exit. then mkt spikes 5 points! and you are not in the mkt! then you are screwed because you took a big loss and just when you needed to be in the mkt. you were not! so its not as easy as it would seem. but hybrid variations are done all the time. by being long on all positions you never run the risk of missing the quick move you were after but it all depends on your entries right anyway either way i have spoken with and know many very successful traders and everyone of them will say. adding to winners is where the big boys make their money!!
just go with the half way point between your adds for your exits. but max loss would be the same as if you are always in..get it you are running this exit amd eneter strategy just the same way except you max loss would be based on your original always in max loss. if the original maxloss always in says reverse then you do the same in my strat. at that point you are admitting defeat and a new strat is deployed right. my way still saves you money when wrong because the exit at max loss will be less than a buy amd constant hold. good luck with it. good convo
I think you misunderstood me. I have no bias in terms of trading. I follow whatever the market is doing that day. I was refering to dozu888 longterm bias as being bullish. He is an investor. I think overall he will be proven correct. The market will have ATH’s again. However, that has absolutely nothing to do with my trading. I am a scalper. I only care about what the market is doing today and what tool to employ to extract profits from the market from it today. I would never invest in indexes holding a position overnight and adding to it over days or weeks. I am always flat by the session end, unless I just goofed up Got distracted or forgot to exit or forgot to cancel a working order and it got filled before the close giving me a position. But I immediately exit as soon as possible thereafter. Holding position Has only happened very few times in my years. I could probably count the Times on 1 hand. I didn’t do as a practice when I trading stocks and I don’t do it as a practice trading futures. I have been trading since the early 90’s. As I recall I have only had 1 margin call all of these years and I promptly had the broker settle that for me by exiting some of my position. I never Blown a real account trading live. I don’t recall ever having even blown a sim account and I have used many Of those to test out ideas. So, you are mistaken if you think I don't have risk management. But I don’t agree with another poster on ET that the only edge in trading is PRM (prudent risk management). You can look up his thread. You might even be him! Roflmao. I believe an edge is a mathematical advantage that keeps a trader making money over time. Averaging down in certain conditions that are conducive to high probability has worked well for me but I am open to any mathematical advantage that improves upon that. I agree positioning is important....
as you add more contracts you always add more risk! no matter if adding to a loser or a winner. the only time you dont add more risk is when you are swing trading or long term investing and you have significant paper profits and you put on a monster position because the worst case is maybe if wrong it goes back to break even and you exit. yeah you lost but not any real capital.
That is obvious that you are against it. But I am an experienced trader too and it works for me. Obviously I have specific reasons for when and how I would do it. But I find, on average, that in a days sessions I can, on average, find reasons for doing it on 40% to 50% of my trades. And there are often days every single trade I take be 5 or 20 are averaging down and every single trade is a winner. That is what gets my friend Fedex confused and he starts blurting out magic...gotta be magic. Identifying the probability of it being successful in each trade is the key to making it work. But to just make a blanket statement “only losers average down” ..no disrepect to Tudor...is just plain wrong. Even professional traders do it and institutions do it every day in the tug of war between bull and bearish Institutions. The institutions are constantly repositioning and building positions adding on every day, all day long.
I am not very smart. Spell this out for me in viable steps. Start side by side with 1 contract in both accounts. When to exit your first attempt when to re-enter again your second attempt and so forth down to say a max of 5 contracts. When will i add averaging in my account to where at the same point we have 5 contracts. Spell it out for me. Take your time. You make up the theory since you understand your thinking. I will execute it and test it in the real world. I am holding the fire to your feet! Lol Will you disappear?