lurkerlurker
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Interesting thread laptop1. Care to share your system for YM day trades? I am attempting to develop one myself (see journal) and would appreciate input.
Regarding scaling in, I am trying not to trade above £1pp spreadbetting the YM. I can see how it would be more profitable over larger moves. I notice that firewalker scales out of trades (posts on the Dow thread), and Dinos scales in on confirmations of 3 and 5 minute charts.
My only issue with scaling in is that I think the market needs to move far enough from your entry in order to be assured of at least a break even. At that point, it isn't always appropriate to add. If you wouldn't enter the market in the same direction if you were flat, then adding to an existing position would be a bad idea. If conditions still favour an entry at that price, you are adding at a worse price than your initial entry.
Consider if you go long the YM at 13630. The market moves to 45 and you move your stop to breakeven. You decide to add another lot from 45. You cover your position at 50, for 25 pips (20+5). Now consider trading 2 lots from 30..you would have 40 pips vs 25. I understand that trades that immediately move against you would incur greater losses.
Do you have a rule that there is only a certain amount of price movement you will tolerate when averaging up? For example, if you were to enter at 13630, with a stoploss at 13620, and the price moved down 5 pips, then up to 13635, would you consider adding at that price? If so, how would that affect your target?
Further, your commission
rofit ratio will be adversely affected if you exit very close to your second or third lot's entry price.
Could you explain more specifically your scaling rules? (or maybe I'm just being a little thick)
Regarding scaling in, I am trying not to trade above £1pp spreadbetting the YM. I can see how it would be more profitable over larger moves. I notice that firewalker scales out of trades (posts on the Dow thread), and Dinos scales in on confirmations of 3 and 5 minute charts.
My only issue with scaling in is that I think the market needs to move far enough from your entry in order to be assured of at least a break even. At that point, it isn't always appropriate to add. If you wouldn't enter the market in the same direction if you were flat, then adding to an existing position would be a bad idea. If conditions still favour an entry at that price, you are adding at a worse price than your initial entry.
Consider if you go long the YM at 13630. The market moves to 45 and you move your stop to breakeven. You decide to add another lot from 45. You cover your position at 50, for 25 pips (20+5). Now consider trading 2 lots from 30..you would have 40 pips vs 25. I understand that trades that immediately move against you would incur greater losses.
Do you have a rule that there is only a certain amount of price movement you will tolerate when averaging up? For example, if you were to enter at 13630, with a stoploss at 13620, and the price moved down 5 pips, then up to 13635, would you consider adding at that price? If so, how would that affect your target?
Further, your commission
rofit ratio will be adversely affected if you exit very close to your second or third lot's entry price.Could you explain more specifically your scaling rules? (or maybe I'm just being a little thick)
