Adding On to Winning Positions | Forex Factory

Options

Go to
Permalinks
Print Thread

Similar Threads

Adding Buy/Sell Arrows to Positions Retrospectively 5 replies

Need code for adding positions during trend 0 replies

Adding positions during a trend 5 replies

Adding to losing positions 20 replies

Position sizing when Adding positions 1 reply

Attachments: Adding On to Winning Positions
Exit Attachments

Adding On to Winning Positions

  • #1
  • First Post: Apr 30, 2013 11:15am Apr 30, 2013 11:15am
I am looking into a way to add on to my winning positions. My main principle when trading is (Trend, Pullback, Breakout).
With trading there is obviously going to be loosing trades. My goal with trading is to make my winning trades far outweigh
my losing trades. When I am in a trend trade and I am at breakeven, I am looking for a solid way to add on to my winning position.
I am trying to add-on when a solid inside bar pattern occurs.

Does anyone add onto winning trades to see exponential profit growth? Or is it a poor idea?
  • #2
  • May 1, 2013 8:41am May 1, 2013 8:41am
Hi,

I wish I could give you a nicer answer. Unfortunately it is indeed a poor idea. Yet at first glance it is seductive. You enter with a small risk and increase the lot size for a winner. Small loss; big win? The stark reality is different.

I've tried for weeks and months to add on a winner. Until I took a pen and a paper and started writing some scenarios and equations. To clearly see the issue you shall think in term of expectancy (average pips per trade) and R:R.

Everything would be so great if the price was going in straight line. But it loves going zigzag. If it goes in your direction it doesn't mean it will reach your target.

When you add to a position you are doing several things:
- First, you're increasing your lot size. That's the whole idea of it so it's quite obvious.
- Second, you're averaging up the entry price. Your original entry and the second one are equivalent to a single bigger position somewhere in between (where depends on the lot sizes).
- Third thing you do is increasing your risk. Where is your SL going to be?

a/ At the same place as the original SL? This is the most logical place since it's the level which voids your trading plan, but your risk increases. Which reduces you R:R (yes, always!).

b/ Somewhere below (say you're Long) the new entry? Here you increase your chance to accumulate little losers on the way. Which again reduces you R:R.

To limit the risk we are almost forced to reduce the SL of your first entry --This is already usually bad in itself--. It increases the risk of getting a loser for the 2nd position and a BE for the first one. Then see the price reaching your goal while you're at a loss. :-/
- Four, you enter nearer of your exit; even if you don't know where it is going to be. Again this reduces your R:R.

If you consider everything altogether, this is equivalent at opening a position too late in the move with a bigger SL and a smaller TP. => Your expectancy is collapsing.
And to make things worse you're now doing this with a bigger lot size...
No greed. No fear. Just maths.
  • #3
  • May 1, 2013 9:38am May 1, 2013 9:38am
Quoting SeanyTsunami
Does anyone add onto winning trades to see exponential profit growth? Or is it a poor idea?
//----

hey seany..... when i have original trades several hundred or thousand pips positive and the trend appears to be continuing, i'll add postions..... but these usually last only a day or two.....

the profit target is usually the 60 minute atr..... occassionaly the 240 atr.....

the ea sends 11 orders, usually 5 or 10 pips apart.... one at market and 5 above/below each limit and stop orders..... roughly speakin, this is done at moving average changes on the 15, 30 and 60 minute timeframes.....

the ea is a tad more complex than that of course..... but to get an idea, look at the usdjpy daily chart and think of sending those 11 orders every time the TSR indicator changed colors on the 240 minute chart......h
to trade and code, keep both simple... no call to impress....h
  • #4
  • May 1, 2013 9:45am May 1, 2013 9:45am
This is all what you need to know about adding positions to the wining positions

http://www.forexfactory.com/showthread.php?t=245149
  • #5
  • May 1, 2013 12:37pm May 1, 2013 12:37pm
Thank-you for the good response, I appreciate it fellow traders.
  • #6
  • May 1, 2013 8:13pm May 1, 2013 8:13pm
I believe that traders who enter on breaks of swing high/lows will often add to their positions. A solid trending market will give opportunities that will allow you to move your SL at each additional entry so that you are not adding additional risk to your initial position.
Sometimes, when the obvious new SL level does not allow the previous entry to exit at BE, the additional position's size should be reduced accordingly.

Attached chart is an example where positions can be added at breaks of swing highs With each new position the SL can be moved to a few pips below the previous swing low.

Attached Image (click to enlarge)
Click to Enlarge Name: add on.gif Size: 19 KB


Note that the entry that would require the SL at SL4 would not allow you to reduce the risk on the previous position, so you would be unable to add to your positions at this time without increasing risk, so would wait until a new entry allowed the SL to be moved to SL5
Please Do Not PM Me With Coding Enquiries
  • #7
  • May 1, 2013 11:06pm May 1, 2013 11:06pm
Try averaging up method and BE your trade. You will get more profit if positions now are in profit with right trend direction, and you won't lose your trade if price move to BE. Additionally, you may add x pips profit for BE.

Example:
Long at 1.3000 x 1 lot. Long again at 1.4000 x 1 lot.
Now your BE price is 1.3500. So add x pips to 1.3500, i put x=30 pips. So now your BE price is 1.3530.

Outcome:
After triggering 2nd position,
1. price reverse or may corrected to hit BE price 1.3530. Result is +30pips.
2. price continue uptrend without hit BE price, so you get big green pips.

Management:
Definite this method as S/R structure, meaning to assign many grid positions with its lots size to form like support/resistance area. So you have limited number of grid, let said 5 grids, so once price hit the last grid position or TP, you exit all position and get very nice green pips.

RR ratio:
You definitely have higher/good RR ratio because of green pips is more than red pips (The only losing position is your 1st grid).

I attached a sample here for this averaging up method.
Attached Image (click to enlarge)
Click to Enlarge Name: Untitled.jpg Size: 127 KB
  • #8
  • May 2, 2013 12:04am May 2, 2013 12:04am
the price action of today makes scaling in a very hard proposition.The market ranges often hence makes sense to scale out of positions.

I have seen the reworked versions of turtle system and the ones that still work well involve longer breakouts and scaling out.

This shows the nature of the markets have changed and will continue to do so to fight systems traders.

incidentally I have been following scaling in systems threads and after a fabulous run they seem to mysteriously die.

my 2 cents.
wo-yoy! wo-yoy! wo-yoy! wo-yoi! wo-yoy-yoy-yoy!
  • #9
  • Edited 12:47am May 2, 2013 12:31am | Edited 12:47am
Quoting pemully
incidentally I have been following scaling in systems threads and after a fabulous run they seem to mysteriously die.
Can you tell me where these threads are even if they are dead? I've been practicing scaling-in and scaling-out techniques for quite some time but mixed results. There is a general lack of discussion (or approval) of scaling methods so I felt alone in trading this way.
Attached Image(s) (click to enlarge)
Click to Enlarge Name: 1.png Size: 36 KB
Click to Enlarge Name: 2.png Size: 42 KB
Click to Enlarge Name: 5.png Size: 34 KB
Click to Enlarge Name: 4.png Size: 40 KB
Click to Enlarge Name: 3.png Size: 42 KB
  • #10
  • May 2, 2013 3:32am May 2, 2013 3:32am
there is a link to pipeasys millipede thread in this thread and look a sypdermans as simple as pi thread. Rasfilmon philax man and also watching jwpdads journal to see maybe if it'll work out.
wo-yoy! wo-yoy! wo-yoy! wo-yoi! wo-yoy-yoy-yoy!
  • #11
  • May 2, 2013 3:46am May 2, 2013 3:46am
I prefer the opposite, adding to losing positions.
Just ignore me. Thanks.
  • #12
  • May 2, 2013 9:40am May 2, 2013 9:40am
Quoting Gumrai
A solid trending market will give opportunities that will allow you to move your SL at each additional entry so that you are not adding additional risk to your initial position.
That's the nice scenario but as permully says you can have very volatile trend. Imagine your SL4 retracing below SL2. You get a BE and a loss. The loss isn't big but they add up... Not a big deal if you can re-enter though.

It can also happen at the very first pullback: a BE + a loss and a trend going away without you. You are now too late to enter safely. A loss instead of a 5:1 winner; This case is a killer for your stats.
No greed. No fear. Just maths.
  • #13
  • May 2, 2013 9:48am May 2, 2013 9:48am
Quoting pipcorn
I prefer the opposite, adding to losing positions.
Which is actually (and counter-intuitively) a good thing as long as you add against a pullback in the direction of the main trend. And because one cannot know if the pullback isn't a reversal they shall share the same SL.
No greed. No fear. Just maths.
  • #14
  • May 2, 2013 10:07am May 2, 2013 10:07am
Yes thatīs how I trade, contrary to what intuition or common sense would do
Just ignore me. Thanks.
  • #15
  • May 2, 2013 1:10pm May 2, 2013 1:10pm
Quoting PipMeUp
{quote} That's the nice scenario but as permully says you can have very volatile trend. Imagine your SL4 retracing below SL2. You get a BE and a loss. The loss isn't big but they add up... Not a big deal if you can re-enter though. It can also happen at the very first pullback: a BE + a loss and a trend going away without you. You are now too late to enter safely. A loss instead of a 5:1 winner; This case is a killer for your stats.
If SL4 had retraced to below SL2, the 3 positions that would be open would be stopped at SL3, so 1 win, a small loss and a loss.
This type of trading with adding positions will only work when the market is making nice HH and HL (if bullish trend), a LL will take you out.
Please Do Not PM Me With Coding Enquiries
  • #16
  • May 3, 2013 9:40am May 3, 2013 9:40am
Quoting anyone
I've been practicing scaling-in and scaling-out techniques for quite some time but mixed results. There is a general lack of discussion (or approval) of scaling methods so I felt alone in trading this way.
//---

hey anyone..... you will have mixed results if the pair is (not trending) or (it is trending and your using traditional trading methods)..... yes, there will be little discussion and even less approval.....

hopefully the pictures below will be clear..... if you watch the td sequential count on all timeframes, it can give good points to add to existing postions.....

as a purely fictional example, say you are short the euraud and the daily/weekly downtrend seems to be continuing..... if the td sequential count on the lower timeframes reaches a +9 or higher, i will usually add to my short positions..... the orders are sent in the manner described above.....

long term trend traders will find the daily/weekly td sequential counts painfully slow.... but if you fall back to the 15, 30 and 60 minute timeframes, signals are quite common......h
Attached Image(s) (click to enlarge)
Click to Enlarge Name: tsr.png Size: 32 KB
Click to Enlarge Name: td.png Size: 42 KB
to trade and code, keep both simple... no call to impress....h
  • #17
  • May 3, 2013 1:02pm May 3, 2013 1:02pm
Quoting hayseed
{quote} //--- hey anyone..... you will have mixed results if the pair is (not trending) or (it is trending and your using traditional trading methods)..... yes, there will be little discussion and even less approval..... hopefully the pictures below will be clear..... if you watch the td sequential count on all timeframes, it can give good points to add to existing postions..... as a purely fictional example, say you are short the euraud and the daily/weekly downtrend seems to be continuing..... if the td sequential count on the lower timeframes...
I don't see any charts in the pictures, black screen for me with rows of numbers. What's "td sequential count"?
  • #18
  • May 3, 2013 1:31pm May 3, 2013 1:31pm
Quoting pemully
there is a link to pipeasys millipede thread in this thread and look a sypdermans as simple as pi thread. Rasfilmon philax man and also watching jwpdads journal to see maybe if it'll work out.
Hey pemully, thanks for the mention. I will say I am not adding to winning or losing positions, the one thing I do is that if I get a new signal more favorable in the same direction I move my stop and profit target, and also the entry point I consider for comparison with my exit signal. I have considered scaling, but recently if I would have added to winners the results would have been very bad as there have been some crazy swings in price movement. Of course earlier the results might have been good, overall I can't see that it would be helpful with the method I am using.
  • #19
  • May 3, 2013 2:13pm May 3, 2013 2:13pm
Quoting anyone
I don't see any charts in the pictures, black screen for me with rows of numbers. What's "td sequential count"?
//----

hey anyone..... that's an ea running on a blank chart.... couple links on td sequential are below.....

td count is only a small part of the actual ea.... the print out with numbers is the current td count on every pair on every timeframe.... it then talleys all the counts per pair, the numbers directly below each pair..... it then talleys all the counts per currency, the numbers to the extreme right......

all this is used along with several other considerations to decide when to add to existing trades..... in the case of extreme trending, such as the usdjpy, much if not all this is unnecessary..... but that ea is trading every pair, so confirmation is a must.....

my goal is simple..... buy low and sell high..... with the fewest possible losses.......h

//----
entire migbank webinar for the youtube video below
//----

Inserted Video
Attached File(s)
File Type: pdf DeMark.pdf   204 KB | 518 downloads
to trade and code, keep both simple... no call to impress....h
  • #20
  • May 3, 2013 2:41pm May 3, 2013 2:41pm
Quoting SeanyTsunami
I am looking into a way to add on to my winning positions. My main principle when trading is (Trend, Pullback, Breakout). With trading there is obviously going to be loosing trades. My goal with trading is to make my winning trades far outweigh my losing trades. When I am in a trend trade and I am at breakeven, I am looking for a solid way to add on to my winning position. I am trying to add-on when a solid inside bar pattern occurs. Does anyone add onto winning trades to see exponential profit growth? Or is it a poor idea?
Itīs an excellent idea, specially in a trending market like forex
It works exactly opposite to scaling out, which goes against your bottom line, cause by scaling out, you make sure your loosers are big and your best winners are half loaded
Master thatand you made it
thereīs a n old Pitīs pro, who encourages exaclty that, he made millions. the majority scale out though, to appease their fears...
0 traders viewing now