The limit ladder is there to lock in profits on the way up. Until we have hit the top and the market goes down and we have to average down. The limit ladder use 4-5 pips spread on each 10 pips profit (or 15 pips profit if you use FTRADERX method). 40-50% of your profit is lost in spreads.
Why not keep the order open and have no profit target. Use the highest position when the market retracts for your to calculate your average.
Example you buy at 204.20 market goes up till 206.20 and retracts. The 206.20 is now the starting point for averaging in. So the market retracts 200 pips as per original strategy and you buy in. Also here forget the limit ladder and use the highest range in the day for use to calculate your average. The limit ladders would have exactly done the same but with trading cost of 4-5 pips for every trade.
Your profit will come in at the time you sell out all your trades when you have hit the average (based upon intra day highs when you placed the order).
Only problem is you have to calculate the average yourself. The Oanda average will only show the average of your market orders not of the intraday highs you would have captured with limit ladders.
I believe this will save you money by doing fewer trades. The spread pips saved from the limit ladder can be used to bank as additional profit or to lower your sell target when you have a lot of open trades thereby reducing drawdown. You get out of all trades earlier.
Can anyone follow my logic and can anyone see negative side effects? Maybe I am completely of the mark here.
Why not keep the order open and have no profit target. Use the highest position when the market retracts for your to calculate your average.
Example you buy at 204.20 market goes up till 206.20 and retracts. The 206.20 is now the starting point for averaging in. So the market retracts 200 pips as per original strategy and you buy in. Also here forget the limit ladder and use the highest range in the day for use to calculate your average. The limit ladders would have exactly done the same but with trading cost of 4-5 pips for every trade.
Your profit will come in at the time you sell out all your trades when you have hit the average (based upon intra day highs when you placed the order).
Only problem is you have to calculate the average yourself. The Oanda average will only show the average of your market orders not of the intraday highs you would have captured with limit ladders.
I believe this will save you money by doing fewer trades. The spread pips saved from the limit ladder can be used to bank as additional profit or to lower your sell target when you have a lot of open trades thereby reducing drawdown. You get out of all trades earlier.
Can anyone follow my logic and can anyone see negative side effects? Maybe I am completely of the mark here.