Averaging down..................

[Splitlink]

When I first read averaging down, I didn't realise you meant scaling in. To me they are two different things. You can scale in as price is moving in your favour or as price is moving against you or even at the same price, but when you average down, I assume you're adding money to a position that is losing.

That's what I thought, too. The two processes are quite different.

 

[tommason]

thats me im stupid but profitable w/avg down and dynamic stop loss. you can see my real broker statement posted on my post

Unless you never have a trade go against you for any length of time EVER. Averaging down /Scaling in / whatever - is a perfectly good and valid way to enter a trade. Extending your exposure above your tolerance just because the price is better than it was however is just stupid.

 

[montmorencyt2w]

@tommason:

I have seen the first statement you posted, and assuming it is genuine (and I have no reason to think otherwise), you seem to have done quite well, so congratulations for that, and for having the courage (or foolishness) to post your statements. This is more than most people here have done.

I am not going to get into a discussion at this time about averaging down or fundamentals versus T.A. even though those subjects interest me.

I would just say that, regarding your own trading, try not to let your current success go to your head. Mentally prepare yourself for the day or days when you may take a big loss (maybe not your fault - could be a "black swan event" or similar). I think it's how you comport yourself at times like those that will show whether you will be a survivor or not.


Good trading,

 

[tommason]

thanks for the advice. I would stay humble. I did take a big loss on my june 1 statement , but i made it back in the next 2 days.(june2 &3). and end up make net profit on June 4 (friday) end of the week.

Previously, I wouldnt be able to make up my losses that quick, I would be emotional and depressed. but now I know how this market work, I reduce that feeling & be more confident. it's like I know how to handle my mistakes (know when not to trade & when to stop).

I hate sales ppl who doesn't post their real statement & give bunch of excuses when u ask them, but keep selling their techniques/indicator running their mouth about this and that w/out any empirical evidence. and if they do reveal , most likely it would be the backtesting result or any other BS.

I wanna be straightforward and honest. I post my losses as well as my gains. no BS.

I busted my ass off.For the past 2 yrs, I blew my account like 10 times or more in less than a month by avg down , put fixed stops,overtrading, etc, and didn't pay attention or didnt know how to react to upcoming fundamental , but now that I know better, I have not blown my acct (it has been 1 month and 1 week)& make even higher profit. its a new record for me i just need to make it longer.

I always monitor the fundamental before I start trading technically.(this is one of my secret that most trader doesnt know or doesnt pay attention, especially the technical trader alone ,but im not gonna explicitly telling anyone about these details). technical alone will never be enough. once I know this, I become more consistent & more profitable.

@tommason:

I have seen the first statement you posted, and assuming it is genuine (and I have no reason to think otherwise), you seem to have done quite well, so congratulations for that, and for having the courage (or foolishness) to post your statements. This is more than most people here have done.

I am not going to get into a discussion at this time about averaging down or fundamentals versus T.A. even though those subjects interest me.

I would just say that, regarding your own trading, try not to let your current success go to your head. Mentally prepare yourself for the day or days when you may take a big loss (maybe not your fault - could be a "black swan event" or similar). I think it's how you comport yourself at times like those that will show whether you will be a survivor or not.


Good trading,

 

[bevok]

I wouldn't advise anyone to start averaging down, let alone on the basis of a one month track record of profitability.

 

[maxima]

you can see my real broker statement posted on my post

i cant see no statement... where they are?

 

[tommason]

there are 5 attachment = may 2010, and 4 statements on first week of june,2010.
I do avg down and never put fixed stop but discretionary stop. thats when i start winning actually.

http://www.trade2win.com/boards/mem...e-i-have-1-month-real-live-record-so-far.html

i cant see no statement... where they are?

 

[tommason]

I agree for new clueless trader they shouldn't avg down.
I avg down b/c my entry was never perfect & by doing it I have cheaper price.
if im wrong i would take BE or 1 tick profit. If i am right then im good.

actually I have 1 extra week profit on June.
i have 4 attachments for first week of June as well if u want to see.
how to change my thread title. cause i already have more than 1 month.
thanks

I wouldn't advise anyone to start averaging down, let alone on the basis of a one month track record of profitability.

 

[tommason]

I forgot to mention. I close all my position at the end of the day most of the time.
(I got caught once or twice to carry overnight in a month.)

I wouldn't advise anyone to start averaging down, let alone on the basis of a one month track record of profitability.

 

[oildaytrader]

I break that rules and I make lots of money. you know as long as u know when to bend and when not to at the right time and see how many time left.
I post my real broker statement in my post u can check it out. I do not even put any stop and I do avg down.

I do not average down but use a betting sequence after every loss

http://www.trade2win.com/boards/gen...sequence-intra-day-trading-3.html#post1146560

Your averaging down method will blow your account due to over exposure to risk, IT IS HIGHLY LEVERAGED TRADING high risk/high reward situation.

http://www.trade2win.com/boards/general-trading-chat/92924-betting-sequence-intra-day-trading.html

 

[tommason]

i only avg down when the market go against me. if not then i wont avg down.
if i eventually right, my avg down will help me.
if i am wrong, i will avg down to look for 1 tick profit or BE.

i know its not recommended for beginner, but I've been doing this and have experience.

the only time when this avg down is dangerous is option expiration week or any major news or when the market hasnt been selling off yet. the worst avg down can be near the closing bell.

the longer the time the high the probability of price bouncing back and vice versa.

did u see my statement ?

I do not average down but use a betting sequence after every loss

http://www.trade2win.com/boards/gen...sequence-intra-day-trading-3.html#post1146560

Your averaging down method will blow your account due to over exposure to risk, IT IS HIGHLY LEVERAGED TRADING high risk/high reward situation.

http://www.trade2win.com/boards/general-trading-chat/92924-betting-sequence-intra-day-trading.html

 

[bevok]

Hi Tom

I'm confused where you say "if i am wrong, i will avg down to look for 1 tick profit or BE.". What about if the market doesn't return to that point and drops 300 points that day (if you're long)?

 

[tommason]

I would use my discretionary mental stop & take the loss long before that 300 points which is too much. it never happen in my loss career before. I never had negative balance ever. Did u read my posts about discretionary stop ?
wait i think ur talking about FX market which i dont play.

the point here is I only use avg down in certain situation not all the time.
e.g. when the market already sell off or rally but it goes slightly lower/higher. its impossible for market to keep penetrating to overbough/oversold level unless during certain situation.(close to market closing time, option expiration,etc).

I also use it on the right time. u know like early in the morning b/c market tend to give u second chance. (if u been trading u will know this)

im just that damn accurate most of the time.
like all my trading was 100% winning on those june2,3,&4.(no loss at all , loss %=zero). believe it or not
only June 1 was screwed up b/c I traded close to market closing.

Hi Tom

I'm confused where you say "if i am wrong, i will avg down to look for 1 tick profit or BE.". What about if the market doesn't return to that point and drops 300 points that day (if you're long)?

 

[Shakone]

Tom, what % of your account are you risking on the initial trade. And what is the largest % you will be risking once you've averaged down.

 

[bevok]

"it never happen in my loss career before"

I won't lecture - I can see where this is going but me telling you won't help. Please just keep withdrawing your profits and put them somewhere safe.

 

[tommason]

I am different .I see it more on the dollar side not the %.
and it is totally discretionary. no calculated method also it depend on time as well.
most people just look at the % without looking at the time.
have you ever regret b/c price bounce back ? and u think if I just wait, I could get breakeven or slight profit.
its based on the idea, the longer time u have the more probability that price will go back in the high probability filled area. the lesser the time u have the lower chance u will get filled.

the key to my trading is to identify this high probability area

Tom, what % of your account are you risking on the initial trade. And what is the largest % you will be risking once you've averaged down.

 

[montmorencyt2w]

Tom,

I think you have given yourself quite a few hostages to fortune back there in some of your comments. I hope for your sake the eventually demanded ransom is not too high!


Good luck anyway, and never stop learning.

Cheers,
Mike

 

[tommason]

I took my profit every week if you see my statement.
u can tell me I dont mind, but I know what im doing when i avg down.
not everyone can do it like me.
Even if i avg down, I close my position at the end of the day. I am a day trader, not swing/position trader.

Thanks for your concern.

"it never happen in my loss career before"

I won't lecture - I can see where this is going but me telling you won't help. Please just keep withdrawing your profits and put them somewhere safe.

 

[petrojobrecruit]

Averaging down is a long-term strategy (Warren Buffett type!) and not advisable for Trading in futures, options, currencies.

Site Administrator
PetroJobRecruit.co.uk
(We also cover Oil Trading Jobs)

 

[tommason]

not advisable does not mean not doable.
I bet u dont know how to avg down like me when daytrading.
why dont u look at my statement ?

Averaging down is a long-term strategy (Warren Buffett type!) and not advisable for Trading in futures, options, currencies.

Site Administrator
PetroJobRecruit.co.uk
(We also cover Oil Trading Jobs)