Averaging Up your winning trade ?

I mean UP... not down..

how to use it profitably ........

since you are right in your trade, why not add some more lot on your winning trade before it reach your TP...

do anyone use it ? how you use it. teach me please..

Thanks.

No one ever do average up for their winning trades ?

I guess it depends on your trading strategy. For example, I trade swings in trending markets, thus as the swing wears on, it becomes less and less attractive for me to enter. In fact, I prefer to scale out as the swing evolves than actually scaling in.

I did try this on demo a long time ago, It didn't work for me. Like WTB, for my strategy as price moves in the direction of my trade, entries become increasingly less attractive. If I was not in a trade at this point it would be too late for me to enter and I would end up chasing the market, which is an absolute nono.

I say no no. The more the price goes your way. The less probable will it continue.... But you never know how long will it go... Maybe on pullbacks you can add further units. But I stay away from this thing.. Id rather close trades...

So it's simply mean

IF we average down our losing trades its a sure way for a margin call and losing account.

If we average up our winning trade, we will still have problem.

It dont work the other way round ?

averaging is a method.

There are two approaches to it. As i have seen many institunal traders like fti and trader888 uses this method to approach the market. And i have a sense that Merlin does this a little too since i have seen one of his posts indicating that he is constantly in the market. lol

Okay the first approach is a loss cutting policy. By averaging down and exploiting the wave nature of the the market, one can reduce their losses by riding the retracement waves.

Second is to exploit trends, for averaging up, one have to have enough foreign and local capital to go thru a series of averaging. When you decide to take profit from a series of averaging, a successful campaign can reduce your basis by aplenty and this will allow you to stay in the market longer riding plenty of whipsaws. It essentially increases profitability.

Allow me to invite you to the thread called Technical Analysis Fallacy, where more on this topic, its apporaches and some MoneyMangament suggestions are discussed.

regards
jest

Any brokers that allow this please name them?

Every broker in the history of trading

I really like this question and it is one that I've been putting a lot of effort into through my live trading and simulated trading.

An example of how I implement added positions...ONLY IN THE WINNING DIRECTION. NOT LOSING TRADES.

My initial SL will be at 2 to 3.5 x ATR(20) with a respective position size where risk is 0.5% of account. Should the price action move favorably with volume, the same move size as my initial SL, I will then move my SL to breakeven and add another position of 0.2% risk with 2XATR(20) stop.

This increases my bet strength in the chosen price direction with limited risk as I've locked in a breakeven on my initial position. You can repeat this as price continues to move. You are effectively increasing the value per pip movement (up and down), but doing so with a level of protection that you wouldn't have if you opened a large initial position.

I don't do this all time. As sometimes I prefer to take my profit and close the trade. I suppose your intuition is important in deciding whether you want to take your profit or whether you want to raise your bet. This is based on the belief that the strength of the move is convincing and will continue. It does however offer significant gain to your account should you catch a few strong moves. I think of it as similar to splitting certain pairs in blackjack...timing is important to give you the highest probability of significant gain in the same hand (move) rather than starting again in a new hand (move). When you are in a position of positive expectancy, you bet! (within risk limits of course!)

Try the above method in your simulation or on demo trades. It would be great to hear your feedback.

Disclaimer:
1. 0.5% and 0.2% of account risk is not what I always risk. This changes based on exposure from other trades that I may be in.
2. ATR multiple and period to be chosen by user. These are numbers that work for me.

SK

2 ways to do it effectively (in my book):

1.- Limit orders above/below to stack them; problem if its the price doesnt retrace a bit they dont get triggered.. BUT if it does the stack boost the profit factor to the moon !!

2.- Direct orders on highs/lows (price retracing): a bit more tricky but only if you dont know how to read candles, and you NEED/MUST HAVE a very clear reasonable/reachable target to close them


as a trader you SHOULD/MUST trade only the high probability moments in the market and MILK IT until the last drop !! you are here to make money, prepare and train to snipe those moment, wait for them and kill it, never forget that

brokers are now offering netting which enables you to add to a position but its NOT exisitng price its a new price! effectivley the same thing as getting in again at a worse price unless your trading long term? The only benefit is you only pay 1 spread for mutiple netting executions.