Increasing size on a loosing position | Forex Factory

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Increasing size on a loosing position

  • #1
  • First Post: Jul 20, 2006 6:03am Jul 20, 2006 6:03am
How many times you have entered a trade and the price went directly in your favor? How many times did the price move against your trade for 10-20-30 pips and then moving in your direction?
Except for news, the price for me usually goes first in the wrong direction. Does this mean that my strategy has some problems or that's just the way it is?
How many of you add to your trade when the price moves against you but the strategy is still valid? What rules do you use?
Try hard, think fast, die young
  • #2
  • Jul 20, 2006 6:18am Jul 20, 2006 6:18am
Quoting dof
How many times you have entered a trade and the price went directly in your favor? How many times did the price move against your trade for 10-20-30 pips and then moving in your direction?
Except for news, the price for me usually goes first in the wrong direction. Does this mean that my strategy has some problems or that's just the way it is?
How many of you add to your trade when the price moves against you but the strategy is still valid? What rules do you use?
In the early days of trading, like many newbies, I would jump on to a trend almost at the point of exhaustion.
I'd like to say I'm cleverer and wiser now (but I won't) but as I develop the skill of judging how close, or far, to place trailing entries I hope this will be less of a problem.
It does seem every time I place a market order, it reverses for a while. I probably need to refine my method and drop down a time-frame or two to get a sharper picture of what's happening.
At least now I don't panic when a price reverses, I've made my decision, knowing some stuff is out of my control, and as long as I feel the entry strategy was right, I accept the loss and move on.
Pete
  • #3
  • Jul 20, 2006 6:28am Jul 20, 2006 6:28am
Quoting PeterFM
In the early days of trading, like many newbies, I would jump on to a trend almost at the point of exhaustion.
I'd like to say I'm cleverer and wiser now (but I won't) but as I develop the skill of judging how close, or far, to place trailing entries I hope this will be less of a problem.
It does seem every time I place a market order, it reverses for a while. I probably need to refine my method and drop down a time-frame or two to get a sharper picture of what's happening.
At least now I don't panic when a price reverses, I've made my decision, knowing some stuff is out of my control, and as long as I feel the entry strategy was right, I accept the loss and move on.
Pete
It's not about panic, I don't panic when it moves against me, it'a about taking advantage, if it's posible.
Try hard, think fast, die young
  • #4
  • Jul 20, 2006 6:40am Jul 20, 2006 6:40am
right, mostly of times moves against you at the beginning...

Its hard to buy at the lowest price and resell at the highest, even if happens some times

I think is normal.

I often add.

today im into the pound in short and Im adding...
only think im afraid is not that there won't be a reversal, but about my margin....
this mistake is something i must avoid to do..
  • #5
  • Jul 20, 2006 6:41am Jul 20, 2006 6:41am
The market almost always moves against me, before reversing and moving my way. At first, I used to panic, but not anymore.
  • #6
  • Jul 20, 2006 6:45am Jul 20, 2006 6:45am
Quoting blueshift
The market almost always moves against me, before reversing and moving my way. At first, I used to panic, but not anymore.
Do you increase your size? Or you just wait.
Try hard, think fast, die young
  • #7
  • Jul 20, 2006 6:47am Jul 20, 2006 6:47am
Quoting dof
It's not about panic, I don't panic when it moves against me, it'a about taking advantage, if it's posible.
Didn't mean to be mis-understood, I was reflecting on my early days in Forex (about 6 months ago) I didn't mean to infer that that applied to you.
At the moment I feel that adding to either positions is wrong for me, I'm not fully in charge of my method or my emotions at this stage.
I'll start doing entries with an extra lot soon and take off a lot as the price hits 1st TP, moving SL to BE and let the last lot take its chance.
In time, I feel that adding to a winning run makes sense, but need to learn to get in nearer the start of a major trend before I can play it that way.
Peter
  • #8
  • Jul 20, 2006 7:06am Jul 20, 2006 7:06am
Averaging a position, i.e. adding to a position that is going against you is often frowned upon by many, and indeed done the wrong way, it is a sure way to a bankrupt account. However fading a market, is a common method used by many with some success, personally if I am going to open 1 lot trade, I will open a part lot at market, and the remaining at a limit order above my entry, if the market moves as I excpected, then I will cancel that order and add to my position, pyramiding in.

Averaging in is only dangerous if you are adding past your accounts margin capabilities and you are not protecting yourself with stop losses. In fact I am fading the EUR and GBP at the moment.
You can quit and they won't care, but you will always know.
  • #9
  • Jul 20, 2006 7:11am Jul 20, 2006 7:11am
When price has formed a PIN bar at a high or low I will begin to scale in a trade ( 3 lots). I will place my 1st lot at the close of the PIN bar. If the price moves against me I place the 2nd at the 38 FIB of the PIN. If price moves in my faver I place the 3rd lot at +10. If price continues against me I close position at the break of the PIN hi/low.The above 3 lots in total = my 2% risk for the trade.
When I am not intentionally scaling into a trade I do not add until I am in profit. I figure I am wrong and will not add until I am right.

Quoting dof
How many times you have entered a trade and the price went directly in your favor? How many times did the price move against your trade for 10-20-30 pips and then moving in your direction?
Except for news, the price for me usually goes first in the wrong direction. Does this mean that my strategy has some problems or that's just the way it is?
How many of you add to your trade when the price moves against you but the strategy is still valid? What rules do you use?
In trading, there is no bullshit. You either make money or you don't.
  • #10
  • Jul 20, 2006 7:19am Jul 20, 2006 7:19am
Here's some free advice. You will die a horrible death if you increase a losing position.

Averaging down is the WORST strategy.

Type "martingale" into google.
google:
  • #11
  • Jul 20, 2006 7:34am Jul 20, 2006 7:34am
Quoting twoblink
Here's some free advice. You will die a horrible death if you increase a losing position.

Averaging down is the WORST strategy.

Type "martingale" into google.
If it's done in panic yes, i think so. But if you are doing it logical, like I saw that some guys here do... it can increase you profit.
Try hard, think fast, die young
  • #12
  • Jul 20, 2006 7:46am Jul 20, 2006 7:46am
Quoting twoblink
Here's some free advice. You will die a horrible death if you increase a losing position.

Averaging down is the WORST strategy.

Type "martingale" into google.
I think it depends in which way you do this and with which principle.
I always profite in this way, apart today that exagerated and probably I will have to close half and loose that if it won't go down
  • #13
  • Jul 20, 2006 7:46am Jul 20, 2006 7:46am
Quoting twoblink
Here's some free advice. You will die a horrible death if you increase a losing position.

Averaging down is the WORST strategy.

Type "martingale" into google.
But only because my margin is small. otherwise i woulnt worry at all
  • #14
  • Jul 20, 2006 9:50am Jul 20, 2006 9:50am
..I had to close half position because of margin problems.. i was 73%..
this was really a big mistake which I did now the second time in 6 months...

Funny that my signature tells me to dont try to become rich in one day, and then I try it by myself

good lessons. Hope will be the last time I did this..
  • #15
  • Jul 20, 2006 9:53am Jul 20, 2006 9:53am
and is double frustrating if then goes also into your direction...like now
  • #16
  • Jul 20, 2006 10:02am Jul 20, 2006 10:02am
Quoting Akuma99
Averaging a position, i.e. adding to a position that is going against you is often frowned upon by many, and indeed done the wrong way, it is a sure way to a bankrupt account. However fading a market, is a common method used by many with some success, personally if I am going to open 1 lot trade, I will open a part lot at market, and the remaining at a limit order above my entry, if the market moves as I excpected, then I will cancel that order and add to my position, pyramiding in.

Averaging in is only dangerous if you are adding past your accounts margin capabilities and you are not protecting yourself with stop losses. In fact I am fading the EUR and GBP at the moment.
Akuma99, what do you mean by fading ?
  • #17
  • Jul 20, 2006 10:04am Jul 20, 2006 10:04am
Trucco, what is it you are trading that this is happening on? thanks scott



Quoting trucco
and is double frustrating if then goes also into your direction...like now
  • #18
  • Jul 20, 2006 10:05am Jul 20, 2006 10:05am
Quoting twoblink
Here's some free advice. You will die a horrible death if you increase a losing position.

Averaging down is the WORST strategy.

Type "martingale" into google.
I agree ... I only scale into a position as it is going WITH me ... if I am wrong on the initial position, I get out with a stop.
  • #19
  • Jul 20, 2006 10:26am Jul 20, 2006 10:26am
Quoting smjones
Trucco, what is it you are trading that this is happening on? thanks scott

Hi smjones,

Thanks for asking.

I realize I did 2 mistakes yesterdy evening..
i started 6 months ago with 2k $. yesterday I reached 8$, and I was planning since a while to retrasfer back some money to my bank account.. (first mistake..)
I moved yesterday back 5k.....(huge mistake because I cut my margin this way.. ).

second mistake : I shorted gbp-usd at 1,8420 for 75.000...and as I was not happy enought I was also short with pound yen...
Then i added again 75k at 1,8516, and then I saw that my margin is over the lines... I forgot I moved the money back

usually I never play so much (especially that now I have only 3k !!)
so I had to close half of position because I dont know what happens tonight..

I think Im not very logic in what im doing today
maybe I need an other holiday
  • #20
  • Jul 20, 2006 10:55am Jul 20, 2006 10:55am
it would have been more cleaver to move bqack 3k and keep 5k . I thnk ill move back
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