Scaling in instead of one entry? | Forex Factory

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Scaling in instead of one entry?

  • #1
  • First Post: Edited Sep 20, 2018 11:32am Nov 14, 2014 10:46am | Edited Sep 20, 2018 11:32am
Do you agree placing for example.

Placing 10 sell of 1 Lot on 95.000, 95.100, 95.200......... is better than 10 Lot on price 95.000

If so, do you agree placing the same lot or increasing of size lot.
E.g. 10x of 1 Lot, or 1 Lot, 2 Lot, 4 Lot, 6 Lot.

When you agree of increasing of size lot, do you prefer a stagnant of TP (meaning all trade with 1 TP) or individual of TP?
E.g. 10x TP at 94.000, or each trade with 10 pip which all opened in different position?

Actually I'm working on these odd numbers to increase my winning rate.

Any comment are appreciate.

forex no deposit bonus
Odd numbers are odd.
  • #2
  • Nov 14, 2014 4:10pm Nov 14, 2014 4:10pm
I think it depends upon how accurate you are with your entries. If you wanted to short the market in the red box but now sure exactly where to place 1 order then maybe it's better to split into several orders. If all the orders don't get filled at least you got some in at an average price of all your entries. Might be better than one order and missing the entry by a few pips. Another advantage of multiple entries is that you can exit in multiple locations as well if you're not sure how far it might go.
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  • #3
  • Nov 14, 2014 5:58pm Nov 14, 2014 5:58pm
As far as entries go, I like to stack 'em on.

Ex. - I see a clear SELL zone on say, AUD/USD between .9200 and .9500 (remember - example...) 300 pips...

I'll start looking to enter anywhere above .9350. I have a max volume I'm willing to trade of .8

.9350 = .10 short entry
.9430 ~ .20 short
.9475 ~ .20 short
.9500 = .30 short

I'll watch carefully and just be open to what price action is indicating and adjust as appropriate. As far as exit, well, I'll have a potential buy area that will develop that I'll start looking to get out of shorts and start building buy positions in the same manner. My own execution is the wild card every time....I tend to trade a bit more swing style so having a trade go against me doesn't really bother me.
"Holy Grail" exists - accepting where is the first step.
  • #4
  • Nov 14, 2014 9:29pm Nov 14, 2014 9:29pm
Simply basing on your question asked, you are still a lonnnggg way to be really in this business. Imho you dont even know what one needs to know in order to succeed in this very tough business. AND even if you know it will be still a long way to find out what you need to know so that what you know will works in the vastly dynamic and challenging different market conditions involving a slew of different currency pairs with its own varied dynamics.

At your present competency level, it will be hard for me even to offer any sort of helpful advice.

Sorry if I sounded a bit harsh but believe me it is brutal out there...

Sincerely yours,

GS
  • #5
  • Edited 11:19pm Nov 14, 2014 9:46pm | Edited 11:19pm
Quoting rapidace
Do you agree placing for example. Placing 10 sell of 1 Lot on 95.000, 95.100, 95.200......... is better than 10 Lot on price 95.000 If so, do you agree placing the same lot or increasing of size lot. E.g. 10x of 1 Lot, or 1 Lot, 2 Lot, 4 Lot, 6 Lot. When you agree of increasing of size lot, do you prefer a stagnant of TP (meaning all trade with 1 TP) or individual of TP? E.g. 10x TP at 94.000, or each trade with 10 pip which all opened in different position? Actually I'm working on these odd numbers to increase my winning rate. Any comment are appreciate....
Jesse Livermore was a legendary and the most feared trader. Many brokers used to refuse his business. Although he traded commodities and stocks but many of his techniques are true for forex trading as well. He invented a method of scaling in that I believe was the key to his success more than anything else.

This is how he traded.

1. Waited for a major trend reversal. He used to keep record of a major trend. For example, for an up trend noted HH and HL levels. This he termed Primary Trend. He used to wait until trend reverses and starts making LHs and LLs. Once this reversal started he termed it as Secondary Trend. He never hurried to take a position because he knew this Secondary Trend could just be a correction and not a reversal. To confirm his understanding, he studied fundamentals at the same time. After getting confirmation both from fundamentals and the ticker (chart) he entered in the direction of new trend (reversal) on a breakout.

2. He sized his entries in three different ways to scale in. To avoid too much detail and confusion, I will limit this discussion to only one such method. He would divide his lots into three equal portions. Let's say if he wanted to enter with three lots, would enter one lot soon after the break. Then he would wait to see what happens to this 1/3rd. If pa goes back and hits his stop loss, he would take the loss. But if this first trade survives, he would not enter the second position on a pull back but would wait for the pa to make another break in the same direction and would enter his second trade on retrace of this second break. He would enter third and last position when pull back of this second break is over and pa once again starts moving in his direction. Most of the time he used to estimate how far pa could travel. For example if his prediction was for 1,000 pips, he would complete his entries in first 100 or 200 pips and will let the position ride until it reaches his target or he sees change in fundamentals. He categorically denied doing consistent pyramiding. If you analyze this, his losses were much smaller than his wins. If he gets stopped out (let's say 200 pips from his entry) after the first entry, his loss would be 200 x 33% = 66 equivalent pips. If he gets stopped out after the second entry (let's say second entry was 100 pips away from first entry) his loss would be 66 equivalent pips + (300 x 33% =) 99 equivalent pips = 165 pips. If he gets stopped out after entering a full position (let's say third entry was 150 pips away from the first entry) his loss would be 165 equivalent pips + (350 x 33% =) 116 equivalent pips = 281 pips. However, his profit would be much more if market proves him right.
The Thief of Wall Street
  • #6
  • Nov 14, 2014 10:38pm Nov 14, 2014 10:38pm
The little bit I've researched about Livermore, I've found one point that makes his methodology useless for FX:

His intention was to enter so large that his entry would move the market and if it didn't, his timing wasn't right and he would bail.

Anyone here care to lay enough on the line to move the FX market?
"Holy Grail" exists - accepting where is the first step.
  • #7
  • Nov 14, 2014 10:51pm Nov 14, 2014 10:51pm
Quoting VaBikePacker
The little bit I've researched about Livermore, I've found one point that makes his methodology useless for FX: His intention was to enter so large that his entry would move the market and if it didn't, his timing wasn't right and he would bail. Anyone here care to lay enough on the line to move the FX market?
He did not move the market while trading in bucket shops.............. and this is the place where he was most successful. Even went back to trade in those shops when failed in New York.
The Thief of Wall Street
  • #8
  • Nov 14, 2014 10:54pm Nov 14, 2014 10:54pm
Quoting Chicky
{quote} He did not move the market while trading in bucket shops.............. and this is the place where he was most successful. Even went back to trade in those shops when failed in New York.
"With the big line he was operating, his own buying/selling had the effect to move the price and therefore, if he couldn’t see his buying/selling moved the stock in his favor, he would consider the timing was not right, so he would either put a reverse order for testing purpose or close out the trade immediately."

http://www.livermoresecret.com/jesse...ading-tactics/
"Holy Grail" exists - accepting where is the first step.
  • #9
  • Nov 14, 2014 10:58pm Nov 14, 2014 10:58pm
Quoting VaBikePacker
{quote} "With the big line he was operating, his own buying/selling had the effect to move the price and therefore, if he couldn’t see his buying/selling moved the stock in his favor, he would consider the timing was not right, so he would either put a reverse order for testing purpose or close out the trade immediately." http://www.livermoresecret.com/jesse...ading-tactics/
How he got to this level of moving the market? Inheritance from his uncle in Africa or a theft from Topkapi Museum in Istanbul or burglary in Tower of London?
The Thief of Wall Street
  • #10
  • Nov 14, 2014 11:01pm Nov 14, 2014 11:01pm
Quoting Chicky
{quote} How he got to this level of moving the market? Inheritance from his uncle in Africa?
No idea. Based on this though I don't see how his methodology can be utilized in this market. (Unless what I posted isn't legitimate to his methods...)
"Holy Grail" exists - accepting where is the first step.
  • #11
  • Nov 14, 2014 11:03pm Nov 14, 2014 11:03pm
Quoting VaBikePacker
{quote} No idea. Based on this though I don't see how his methodology can be utilized in this market. (Unless what I posted isn't legitimate to his methods...)
Only if you carefully read what he wrote ..............................................and what I have mentioned in my post above.
The Thief of Wall Street
  • #12
  • Nov 14, 2014 11:07pm Nov 14, 2014 11:07pm
Quoting Chicky
{quote} Only if you carefully read what he wrote ..............................................and what I have mentioned in my post above.
Copy in the part of what you posted previously you're referring to maybe?
"Holy Grail" exists - accepting where is the first step.
  • #13
  • Edited 11:21pm Nov 14, 2014 11:10pm | Edited 11:21pm
Quoting VaBikePacker
{quote} Copy in the part of what you posted previously you're referring to maybe?
This is a two-page thread. Press a button and see the post. Come on man!
The Thief of Wall Street
  • #14
  • Nov 14, 2014 11:24pm Nov 14, 2014 11:24pm
Quoting Chicky
{quote} This is a two-page thread. Press a button and see the post. Come on man!
Provided you're talking about point #2 and the latter part of it, sure, you can play like that but why?

The market is pretty clear via price action on where reversals could take place and what direction you should be considering at certain points. Why not wait for the market to reach those points, trade them in the appropriate direction and just roll with it?
"Holy Grail" exists - accepting where is the first step.
  • #15
  • Nov 14, 2014 11:25pm Nov 14, 2014 11:25pm
Quoting Chicky
{quote} He did not move the market while trading in bucket shops.............. and this is the place where he was most successful. Even went back to trade in those shops when failed in New York.
You're quite right Chicky....according to the book 'Jesse Livermore. World's Greatest Stock Trader'...which admittedly is the only book about him that I've read, but I've read it several times.....
Doing what you like is Freedom. Liking what you do is Happiness.
  • #16
  • Nov 14, 2014 11:29pm Nov 14, 2014 11:29pm
Quoting VaBikePacker
{quote} Provided you're talking about point #2 and the latter part of it, sure, you can play like that but why? The market is pretty clear via price action on where reversals could take place and what direction you should be considering at certain points. Why not wait for the market to reach those points, trade them in the appropriate direction and just roll with it?
Look my friend, I am not Jesse Livermore, just providing information how he scaled in. If you want a quote from this copyrighted book, give me few minutes.
The Thief of Wall Street
  • #17
  • Edited Nov 15, 2014 12:23am Nov 14, 2014 11:44pm | Edited Nov 15, 2014 12:23am
Quoting Chicky
{quote} Look my friend, I am not Jesse Livermore, just providing information how he scaled in. If you want a quote from this copyrighted book, give me few minutes.
Here are his exact words, but this statement alone is incomplete, one has to understand his whole trading philosophy. He always wanted assurance before taking any trade. Bought on the rise because this provided him the assurance that he was right, yet again he looked for better price, one reason I mentioned he bought on retrace of second break because this is how price can come near to his first buy. Retrace of first break will take the price below his first buy and he did not buy second lot when first was in loss. In this book, he never mentioned about the spikes or prices going temporarily against him only to the extent that sometimes 40% of his unrealized profits vanished but he sat tight.


People don't seem to grasp easily the fundamentals of stock trading. I have often said
that to buy on a rising market is the most comfortable way of buying stocks. Now, the
point is not so much to buy as cheap as possible or go short at top prices, but to buy or
sell at the right time. When I am bearish and I sell a stock, each sale must be at a lower
level than the previous sale. When I am buying, the reverse is true. I must buy on a
rising scale. I don't buy long stock on a scale down, I buy on a scale up.
Let us suppose, for example, that I am buying some stock. I'll buy two thousand shares
at 110. If the stock goes up to 111 after I buy it I am, at least temporarily, right in my
operation, because it is a point higher; it shows me a profit. Well, because I am right I go
in and buy another two thousand shares. If the market is still rising I buy a third lot of
two thousand shares. Say the price goes to 114. I think it is enough for the time being. I
now have a trading basis to work from. I am long six thousand shares at an average of
111, and the stock is selling at 114. I won't buy any more just then. I wait and see. I
- 66 -
Reminiscences of a Stock Operator
figure that at some stage of the rise there is going to be a reaction. I want to see how the
market takes care of itself after that reaction. It will probably react to where I got my
third lot. Say that after going higher it falls back to 112, and then rallies. Well, just as it
goes back to 113, I shoot an order to buy four thousand at the market of course. Well,
if I get that four thousand at 113 I know something is wrong and I'll give a testing
order that is, I'll sell one thousand shares to see how the market takes it. But suppose that
of the order to buy the four thousand shares that I put in when the price was 113 I get
two thousand at 114 and five hundred at 114.5 and the rest on the way up so that for the
last five hundred I pay 115. Then I know I am right. It is the way I get the four
thousand shares that tells me whether I am right in buying that particular stock at that
particular time for of course I am working on the assumption that I have checked up
general conditions pretty well and they are bullish. I never want to buy stocks too cheap
or too easily.
The Thief of Wall Street
  • #18
  • Nov 14, 2014 11:52pm Nov 14, 2014 11:52pm
Quoting Chicky
{quote} Look my friend, I am not Jesse Livermore, just providing information how he scaled in. If you want a quote from this copyrighted book, give me few minutes.
No worries here...we're all wired different
"Holy Grail" exists - accepting where is the first step.
  • #19
  • Edited 12:21am Nov 15, 2014 12:05am | Edited 12:21am
This is another quote relating to what I said in my earlier post about pyramiding and Jesse.


I don't mean to be understood as advising persistent pyramiding. A man can pyramid
and make big money that he couldn't make if he didn't pyramid; of course. But what I
meant to say was this: Suppose a man's line is five hundred shares of stock. I say that he
ought not to buy it all at once ; not if he is speculating. If he is merely gambling the only
advice I have to give him is, don't!
Suppose he buys his first hundred, and that promptly shows" him a loss. Why should he
go to work and get more stock? He ought to see at once that he is in wrong; at least
temporarily.

One basic requirement of scaling in is to trade bigger moves. If tp target is too short, by the time one gets confidence that trade is going in his/her speculated direction, it will be time to close the position. But if one is looking far ahead, can scale in as the market goes in favor.
The Thief of Wall Street
  • #20
  • Nov 15, 2014 6:52am Nov 15, 2014 6:52am
In a chat I participate in there's a fellow who trades like this. I'm not sure if it's his execution or the style but he takes on losses that he doesn't have to like a dance routine. I haven't logged his trades but his losses reduce healthy portions of recent profits, sometimes as much as 30%. Part of me thinks it's because of over leveraging but the other part thinks it's also from not having a clear understanding of the size of move it would take to actually crap out his account too.
"Holy Grail" exists - accepting where is the first step.
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