thread: Averaging when already In the RED....

CateFul,

Simply,what dt is stating is that simply because your losing does not mean that you've lost(you only lose when your quit outside ).Therefore,if you have not dropped,putting another position is simply giving you an average position nearer to current prices and therefore beneficial,given it does not exceed your highest possible risk.

If your whole risk is 2% and your stop on your first position is 2%,then you've got no business buying/selling in again.
You must break up your position in order to operate this way.
I do this quite frequently and it works nicely.
Dt,if I have misunderstood I want to know and most of apologies if I have.
I wouldn't want to confuse things,trading is confusing enough as it is.LOL.


Cheers
sk

CateFul,

Just,what dt is saying is that just because your losing doesn't mean you've lost(you only lose when your quit outside ).Therefore,when you have not dropped,putting another position is only providing you an ordinary position nearer to current prices and so beneficial,provided it doesn't exceed your highest possible risk.

If your whole risk is 2% and your stop on your first position is 2%,then you've got no business buying/selling in again.
You must split your position up in order to operate this way.
I do so quite frequently and it works...

Yes, all-in-all what you're saying reflects my primary purpose.

I'd add though that even in the event that you do this'breaking-up' of a entire planned position into smaller increments in order to ordinary, there is still a matter of time involved. That is the difficult role in knowing when you're flogging a dead horse vs. building a highly profitable position - which is more a matter of each traders person trading procedure. Not many methods require averaging to be profitable of course and finally that's why imo for the saying' losers' occurrence ordinary losers'.

In trading models where you've fixed standing sizes and fixed stops it'd of course be a matter of violating these principles, should the trader maintain a fixed position beyond a fixed stop in order to attempt to average the trade out - and consequently running the risk of losing more than permitted by the system or losing greater than initially calculated.

It's all about the definition of a'loser'.

regards

Averaging works... only if perform a nicely informed investment and using no leverage.

Meaning
'when price drops, you can acquire the golden property at more favor price' (buffet)

well advised and no leverage is key to the'averaging', also should enter next position in a major amount like day TF m-m degree,
make sure that the averaging is important enough compared with market moves

still amount of place to expose in a single pair is to function as well controled, favor lt;10 percent of total equities assuming no leverage. (turtles)...
putting all one's money or more in a single wager is nothing but suicide.

In short-term trading of no significance pair, too freq use of averaging is readily run into over leverage
(by way of example, 10x 1st place, 10x when in red, another 10x double and you may only tolerate 2.5% market movement )
... (then and no stop/loss habit) will blow up readily.

Do a hedging on a pair which reversely correlate with this one can help, this not necessarily locks the loss.
If you really believe waiting long enough time, your target could be hit after a market correction,
perform a hedge on another pair reversely makes much relief coz you do not see loss grow with price movements.

Hi Guys,

Im starting this thread as a disscusion on whats refered to as'Averaging down' (I presume ). I know this is frequently looked down as a bad move, but with the arrival of FTI there seems to be quite afew practising it and that I also have suspicions that some members also Emlploy It into their trading strategies.

I averaged down In my method which I examined In the Journal section of this site, and I did very nicely became obsessed with analyzing It way so have since analyzed It onto a forex simulator and've been undergoing comparable...

His buy orders were at various levels - some above, some below his very first buy....but all above a level he would definitely get out (should it go that low).

However, not a contradiction with the sign on the wall. Really great illustration and explanation. Helps to know the gap between scaled trading and averaging champions. Pretty clear that he put the sign up to make sure he was clear about which side of the fence he had been on.

To prove my point, here is a quote from Paul Tudor Jones' Meeting with Jack Schwager in the Market Wizards Publication. Page 123:....and I had been buying it every time it came down to the low end of the range.

Were he end up losing a lot more than that he would on this trade? He was not climbing , his pos got bigger in a ranging market to compensate the vol. He bought more than that he wanted to carry.

You guys are pretty competitive here lol. Scale in is fine, heck I climb in too. But doubling up on a trade is the worst thing you could do.

Everybody's got their own modus operandi. Simply your template is different than mine does not make yours mine and wrong right, nor the other way around. There is A degree a degree. It isn't important how you get in at the level. You may opt to put on half at 5050 as well as another half at 4950 to find a mean of 5000. I may place on half at 5050, cut out it . Put it back at 5000, and include up all of the way. That guy across the room may put on a pos at 5000. Same tickets.

Good trading.

Hi,

no offence meant - as long as we discussing the exact same thing for the learners.

Great trading for you also.

regards,

difficult part in understanding when you are flogging a dead horse, constructing a highly profitable position

Absolutely dt.

Everybody's got their own modus operandi. Simply your template is different than mine doesn't make yours wrong and mine right, nor the other way round.

Provided your strategy makes cash overall CateFul,it doesnt matter how you skin your .Couldn't agree more.

Buy more when you're on the side of the market and winning. Go with a trend NEVER contrary to it. Simple...

This afternoon scale-in trade.

Maybe room up to 97.50 initially.

regards

I got long at 95.85, Placed the pending order evening. There was alot of fuss regarding quits and Strikes and Interest around the area.

DT, if its not too much trouble could you have a look at this post and the ones following It. I thought I knew all this a while ago but maby not....

https://www.cliqforex.com/general-fo...ion-forex.html