DislikedMy daily plan is as follows: Start building LONGs below 1.3150s up to 1.3120s SL should be placed as close as possible 1.3100, 1.3096 was a good support. Unfortunately that is one nasty thing of having a tight range for a full day, next day the range shoots over a little and if you plan to have one single entry, you may be easily burnt. So better to have multiple entries at different levels. This strategy applies to newbees like myself, if you are good at picking perfect entries you obviously don't need this type of strategy. Good luck..!...Ignored
morning,
I know that plenty of people on here do build positions in negative territory but, I thought I would show you a couple of reasons why it is not a good idea....
1. It breaks a very good rule - do not add to losing positions
2. You are trading the wrong target range (you end up trading the range back to your first entry rather than the target range above your entry.
3. The losses can become exponential
look at the table below which shows you the losses based on entering every 10 pips 3150-3120 and then hitting SL or return to 3150, same for two entries and then just one entry.
now consider the size of that risk compared to what? you wanted to trade the range above 3150, but have ended up taking on much more risk to trade up to 3150 when the price has clearly been moving against your positions - ie: as the pain gets worse you have added more risk....
The third table is where you want to be @ 0 loss for your prescribed entry @ 3150 which means you are trading the range above not below.
I would suggest that your comment about easier for neewbies to do this is actually the wrong way around, if somebody is not so good at picking levels then it is even more important not to add to losing positions.
have a think about it