kimo'sabby
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Wacky pete, there is an obvious comeback to my post, work it out.
wackypete2
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OK, I'm lost. Nothing is obvious to me. My mind isn't as sharp as it used to be...and it wasn't really too sharp to begin with! The whole reason I trade well is because I'm too dumb to realize I'm risking my heard earned money in this fools market 
Peter
Peter
kimo'sabby
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OK, I'm lost. Nothing is obvious to me. My mind isn't as sharp as it used to be...and it wasn't really too sharp to begin with! The whole reason I trade well is because I'm too dumb to realize I'm risking my heard earned money in this fools market
Peter
Do me a favour, explain to me in detail what averaging is, can you do this? I want to know about stops, entries, targets, MM etc etc.
Explain what this averaging is, can you do it, can anyone on this site do it?
wackypete2
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Confirmed.
ok here's an example, right now IMO GBPUSD looks oversold right? the trend IMO is down and i belive that after another pullback up it will continue down.
So instead of waiting for price to pull up 500-600 pips, i set sell limits a certain distance apart from each other, and i add lightly first, and add more agressively the higher the price. In fact i double, as in start at $1/pip,2,4,8 and so on, this way your average price is brought up further.
On each of these sell limits is a profit target which is the same, and they all have the same stop loss.
montmorencyt2w
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My way, explained above, could have ended badly but I can't see how it could have ended worse, as my loss was known and I could have called it a day at any time.
To be honest, that is why I am not keen on Tom and Co's method of overnight swing trading, I prefer a guerrilla war rather than a prolonged one. I know that I am old and grumpy but I try to live another day.
@Split: Do you mean you close positions at the end of each day?
It is certainly a way of sleeping easier (except for those who worry about opportunities missed ) ).
@Chartsy: I am somewhat more sympathetic to your original stance than my posting may have suggested, as it happens - perhaps I way playing devil's advocate. I too try to take a fundamental view of the way the market is going. However, if you get that wrong, or your timing wrong, plus averaging down (which implies the market has already gone against you to some degree), plus over-leveraging, well it can be a pretty poisonous if not lethal combination.
then you get filled, but obviously a smaller lot size but you are in much earlier than i would have been with my hard entry methods. This way even if price pulls up a little you still get filled. and if price pulls back normally and hits where your hard entry would've normally been, doubling lots along the way means average price is dragged further anyway; so if all your limits get filled, on average your price may not be that different to that of a hard entry,.
lol yeh think im wrong. sorry i just like to make things clear about averaging down, there are some common misconceptions about it and i'd like to clear them up
I try to get out every morning!Which brings me to another thing. What happens if you are averaging down and you get to the end of your session and what you planned to happen hasn't happened? Do you get out, stop, trade overnight or do what? Because there is no guarantee that the trend that you are in is going to change, is there?
wait, you can't buy at a price that isn't trading now... so it owuld get filled at 0.9 in that case
wackypete2
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Which brings me to another thing. What happens if you are averaging down and you get to the end of your session and what you planned to happen hasn't happened? Do you get out, stop, trade overnight or do what? Because there is no guarantee that the trend that you are in is going to change, is there?
Since I am almost entirely a daytrader I would absolutely exit. There's always tomorrow. I don't average down very often anyway but not for all the reasons posted here. Averaging down keeps me in the trade longer. I'd rather get out and look for a better entry or another opportunity elsewhere. I do the same thing if the price just stalls when I enter a trade..exit.
Peter
kimo'sabby
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Yes, but one trade has or should be bound by parameters ie: entry, exit, loss.
Reckless averaging has no bounds, no stop, and no target.
This is true averaging.
wackypete2
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You haven't traded forex much, have you. Believe me, you will get filled at 1.10. It doesn't have to print at that price, just go through it. If instead, you had a sell stop or stoploss at 1.10, THEN you would be filled at or near .90. Check with your broker if you don't believe me...also ask if they guarantee your stoploss price during news events and see what they tell you!
Peter
lol shows what a noob i am, over a year in forex learning and didn't know that
wackypete2
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lol shows what a noob i am, over a year in forex learning and didn't know that
We were all newbies once! But don't worry, no matter how long you've been playing this game there is always more to learn
Peter
kimo'sabby
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The only way to trade in multiples is to use a stop at a fraction of the identified volatility. Even then, this takes a lot of skill on the traders behalf.
Knowing when to size in and knowing when to stop chasing a direction.
Knowing when to size in and knowing when to stop chasing a direction.
timsk
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Scaling into a position has always made a lot of sense to me. The market doesn't give two hoots about the specific price levels where each of us draws our respective trendlines and S&R lines etc., so, working a zone of resistance or support is both logical and sensible. The reason why the practice tends to be frowned upon on sites like T2W is that it does require excellent risk and money management skills. Not difficult or complex ones necessarily, rather the ability to place your entry orders in the right place and your stop at a level that's highly unlikely to be hit. And that's the difficult bit for most of us. I've tried repeatedly over the years to integrate such an approach in my trading. However, I've never really got it to work. The reason (in my case) is as follows . . .
Suppose one is buying pullbacks in a longer term uptrend and let's say one sets three limit buy orders evenly spaced apart. For the sake or argument, the middle order is the point one expects the trend to resume. The two orders bracketed either side of it are in case the market doesn't quite reach the anticipated level or, alternatively, overshoots it. Some distance beyond the final order is the stop loss order. In my experience, what tends to happen is that the first order is triggered - but not the other two - and price then moves in the intended direction and makes a small profit. All well and good you might think, but the trade is only one third of its optimum size. The flip side of this is that all three orders are filled - followed by the stop loss making a loss three times as big as the winning trade. Unfortunately, the ideal situation where all three orders are filled and then the market quickly takes the trade into profit doesn't happen very often. The paradox is that if one could be sure that order No.3 would be filled - but not the stop loss order beyond it - then there would be no need for the first two scaling in orders. One could just have a single order at three (or more) times the size and move the stop even further away.
The solution - in part at least - is to have very deep pockets and to continually be scaling in at much lower levels, confident that the market will - sooner or later - reverse direction and at least get one's trade back to breakeven. This is a great way to excel in trading competitions using virtual money to turn $20k into $150k in a single day and win a bottle of very nice wine for one's efforts. However, as I think 'Medbs' has found out on his 100% Holy Grail thread, sooner or later the market gets the 'ump and refuses to play ball. And that's the point one does a Nick Leeson. And none of want to follow in his footsteps now do we!
Tim.
Suppose one is buying pullbacks in a longer term uptrend and let's say one sets three limit buy orders evenly spaced apart. For the sake or argument, the middle order is the point one expects the trend to resume. The two orders bracketed either side of it are in case the market doesn't quite reach the anticipated level or, alternatively, overshoots it. Some distance beyond the final order is the stop loss order. In my experience, what tends to happen is that the first order is triggered - but not the other two - and price then moves in the intended direction and makes a small profit. All well and good you might think, but the trade is only one third of its optimum size. The flip side of this is that all three orders are filled - followed by the stop loss making a loss three times as big as the winning trade. Unfortunately, the ideal situation where all three orders are filled and then the market quickly takes the trade into profit doesn't happen very often. The paradox is that if one could be sure that order No.3 would be filled - but not the stop loss order beyond it - then there would be no need for the first two scaling in orders. One could just have a single order at three (or more) times the size and move the stop even further away.
The solution - in part at least - is to have very deep pockets and to continually be scaling in at much lower levels, confident that the market will - sooner or later - reverse direction and at least get one's trade back to breakeven. This is a great way to excel in trading competitions using virtual money to turn $20k into $150k in a single day and win a bottle of very nice wine for one's efforts. However, as I think 'Medbs' has found out on his 100% Holy Grail thread, sooner or later the market gets the 'ump and refuses to play ball. And that's the point one does a Nick Leeson. And none of want to follow in his footsteps now do we!
Tim.
trader_dante
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All the pros I worked with averaged down.
I never do it.
I never do it.
