|
Quote: |
|
 |
|
|
This is a considerations that has occurred to me lately.
Sometimes, usually later in the day, if I am up, I will start taking half positions on my trades so as to not blow away my existing profits on stop outs. Seems prudent at first glance. But wait! I've noticed that it tends to be an excuse to get into a half-assed setups because nothing else is going on, or is just a reflection of chickenheartedness, and neither is a good habit to foster. If the latter and if the trade works out I kick myself for not taking a full position.
A trade is either worth a full position or it's probably not worth the trouble. In or out, black or white.
Another way to look at it is to ask: Would I take this trade with double my usual position (assuming your account could tolerate such a trade)? That tends to clarify things. |
|
|
|
|
I think this is a different situation and not uncommon with many traders.
If your profitable early in the trading day and
fear losing those profits later in the trading day...
It's a
discipline problem if your decreasing a position size is also encouraging you to take trades you normally don't take just because the market is boring as in
nothing else is going on.
Not taking these types of trades is the proper thing to do.
In contrast, taking these trades with a partial size and seeing the position become profitable...
That's a bad trading habit to get into because your enforcing the concept that taking trades outside your trading plan is OK TO DO and when doing such you should go with a FULL POSITION SIZE.
Here's an analogy, lets say you have a very reliable signal when your signal appears at a s/r level.
You also know your signal is not reliable when you trade it in price action that's no where near a s/r level.
However, on some occasions a few of those trades are profitable even though overall its a losing situation.
Your suggesting that its worth the risk to put on a full size position on taking trades not near a s/r level in hopes of catching those few times when the trade will be profitable.
In my opinion, this will instill poor trading habits.
Simply, if the price action is not part of your signal...
Don't take the trade along with squashing any thoughts via hindsight analysis that had you taken that particular trade when it would have work...
You would have made money even though its not part of the price action you should be trading.
Another way to look at it...if its not a valid pattern signal...it does not merit a lower position size nor a full position size.
Instead, it merits
no position and you should be on the sidelines.
Mark
(a.k.a.
NihabaAshi) Japanese Candlestick term
"Volatility Analysis opens the door to consistent profits."