Note to self:
Stop adding to positions that have not really moved in your favour.
Perhaps...MAYBE...Limit it to 1 re-entry under these conditions if I truly believe that the market is just offering me a chance to get in at better value.
The re-entries were very low percentages of my account, but when they get knocked out, it destroys my win/loss ratio
One thing that you might notice in your research which may relate to this post.
There are certain sentences that I have come up with over the years that are always in the back of my mind.
This is one of them:
The opportunity to get the very best price in the market is often very limited.
Now,what do I mean by that and how does it help us to trade better
?
If you look at each trading day there is a high and a low. There has to be really doesn't there? But what you'll find is there are some statistics on where these prices tend to appear most often.
Once you determine where the H/L's most often appear during a trading session you'll be happy. You will have answered a couple of important questions.
Q- Is the market random?
A- Apparently not.
Q- How should I exploit this repeating pattern?
A- Fill in the blank.
The second thing you'll note is that, often price will hit the low/high of the day and never go there again for the rest of the day.
And, in fact, look at the S&P500 now (15:43 pm) A probable case in point. Then look at my journal post p294 updated at 3pm. That will give you an indication that it is possible to identify the H/L more often than the' voices of trading' say is possible.
So TIME is an important element.
Which brings us back quite nicely to your 'bad habit'
If you find yourself adding to a position at a similar price, you are almost certainly building a position that is not going to move quickly in your favour.( Because remember, the best prices reverse quickly and are rarely revisited during the same session)
So, to conclude. You are probably adding because it is human nature to believe that your goals are best achieved by being busily employed. So you're attempting to work hard to produce the results.
It's difficult to iron out the human weak points in trading. Takes time. I think it helps if you tell yourself (after verifying the stats yourself) that working hard in this way is counter productive.
I'll end on another one liner. This one is not of my own invention. It was something I read an another forum a few years ago. So I'm not able to link or give a credit. But it does tie in with the theme and sounds like a good ending:
'I only do trades that I would literally run down the road to my broker to put on'
