If you are long on a position, then you should never ADD on a dip. That's probably the worst thing you can do.
If the price is heading up, you should think buy. If the price is heading down, you should think sell. If you are doing the opposite of that, you aren't thinking.
If you are in a short short short timeframe, then you should enter full position, and exit full position.
If you are in a short timeframe, you should enter with a full position first and then remove parts as you are wrong.
If you are in a long/longer timeframe, you should enter a position, pre-estimate your max (Sigma) position size, and add to it.
Now, "regular" modeling says that you keep adding to your position.
Cocaine Distribution Model says you keep adding positions.
And I'm not talking about just English differences here; If you don't know the difference between the two.. well.. study harder. But make sure you know which model you are following.
Perhaps I am the only person on the cocaine distribution model, but whatever model you use, make sure you understand why you are using it and how it is effected by pre-positions, and what kind of exit strategies best work for it.
If the price is heading up, you should think buy. If the price is heading down, you should think sell. If you are doing the opposite of that, you aren't thinking.
If you are in a short short short timeframe, then you should enter full position, and exit full position.
If you are in a short timeframe, you should enter with a full position first and then remove parts as you are wrong.
If you are in a long/longer timeframe, you should enter a position, pre-estimate your max (Sigma) position size, and add to it.
Now, "regular" modeling says that you keep adding to your position.
Cocaine Distribution Model says you keep adding positions.
And I'm not talking about just English differences here; If you don't know the difference between the two.. well.. study harder. But make sure you know which model you are following.
Perhaps I am the only person on the cocaine distribution model, but whatever model you use, make sure you understand why you are using it and how it is effected by pre-positions, and what kind of exit strategies best work for it.
google: