Adding to Winners

Hi,

I am in a winning trade now and I have moved my stoploss so even if I get stopped out it won't turn into a loss. What I am thinking of doing is adding to it maybe an equal amount as the initial amount. However I am not sure if I should add to it by this much or not. Does anyone know a good technique for scaling in like this?

Thanks a lot.

If you are a 10 lot trader I think it is best to enter 3, 2, 2, 2, 1. At intervals on the way down/up.

If only 2 lot then I do 2 initial and just get out half, move stop to break even.

i would only add enough that the stop loss of the new trade, if hit will not mean you are going to end up with a loss over the sum of both trades.

Make sense?

Personally I never add to winning positions. It might well make money, which is seductive, but next time you will definitely want to pyramid but will the situation and your response to it be the same?

For me, each trade is a step towards perfect execution of a plan, leading to a perfect plan. I'm trying desperately not to think of the unrealised gain/loss: if I did, I would regard that as letting the tail wag the dog.

coopster said:

i would only add enough that the stop loss of the new trade, if hit will not mean you are going to end up with a loss over the sum of both trades.

Make sense?

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I see what u mean. I might try it but it seems tricky.

If for example you enter on a 1min t/f and supporting that 1min set-up are set-ups on say 5min and 30min but they as yet have been unvalidated by individual price action (ipa,) ie there is no candle trigger for entry on those, then you could enter on that 1min ipa trigger, and then see how the 5min and (15min,) 30min candles close and enter on them too as those set-ups on those t/f's which initially gave you confidence to act on the 1min trigger, are set-ups in thjeir own right and now have an ipa trigger in their own right.

G/L

Adding to positions is not good practice because it may erase your profits or double your losses.

bashatrader said:

Adding to positions is not good practice because it may erase your profits or double your losses.

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This is nonsense advice, adopt it at your peril. Whilst there is no imperative to add to a winner it is preferable than adding to a lower (averaging,) and as we as traders have to maximise on the winners and minimise the losers, it is sensible to add to them if the appropriate set-up develops to indicate a continuation in the original trade direction is the higher probability.

G/L

bashatrader said:

Adding to positions is not good practice because it may erase your profits or double your losses.

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It goes without saying that 99.99% of material posted here is absolute nonsense, but this garbage probably takes this years prize for worst ever advice given on a "trading forum"

If it was posted in the spirit of LULZ then I appoligise and offer my thanks, as I did actually **** my pants laughing.

bashatrader said:

Adding to positions is not good practice because it may erase your profits or double your losses.

Click to expand...

Adding to winning positions is a very good idea! My method mentioned earlier would never double the losses. It could reduce profits but the risk reward ratios become very high when the risk is zero % your own money!

Gotta be in it to win it!

Each step of the trade should be rated on its own merits and only undertaken if already well into profit on the original trade.

Note I'm not talking day trading here.

Adding to positions is about risking small and winning bigger, with the understanding that a profit is not a profit until you book it. Your maximum risk to capital is at point of initial entry so that is where you want minimum risk, say a 1/4 position. If you lose it's not such a big deal. As price goes your way you reinvest your unrealised profit until hopefully you have a full position on.

As an example you've got your 1/4 position already on, you see price break through and close above a perceived resistance level. You then add to the position such that you move your average price a way under the new perceived support: where you would have liked to have entered if you were entering the market at that point with a first part-position. You do not use a stop with this second entry (or if you do you place it WAY away). And you continue until you have your full position on. Personally I would recommend adding no more than about 3 times and exiting when you see large momentum in your favour.

Warning: Do not allow price to come back your average price