[SIUYA]

Originally Posted by maxr »

You work out your position size from the technical stop and maximum loss (let's say 2 %) you've decided on - comes out to say 2 lots. It goes your way, and you set the stop to breakeven. Risk is now 0 (apart from maybe some slippage on your stops). Up it goes, and another pullback entry presents itself. You're happy trading at max 2% loss, so you enter with another 2 lots (which gives you total 1% risk now), and you're in luck again - this is becoming a trend, so you can move the stop up to breakeven on the last 2 lots and the same level on the first two. You're now trading 4 lots at breakeven or better with guaranteed profit on 50% of the position. Another leg up, and another entry signal occurs after a third pullback, so you do it again - 6 lots now, with guaranteed profit on 2, and better than breakeven on 2. We'll leave the trade there in case Elliot wave enthusiasts get overexcited, but here's the question...

By scaling up in these circumstances, would I be actually following the 2% max risk level I set (and indeed reducing the total risk below 2% with each additional entry), or would that figure as generally understood include the assumption that a stop woul be set to breakeven as soon as practicable and the position size would only be held or reduced, not increased?

- it is as long as a piece of string....with many questions of how to pyramd in, pyramid out, is it better to buy things all at once, exit all at once, how to control the overall risk. Will you put a limit on things....

Most will depend on your personality and risk tolerance.
I think you really need to have in your head as well exactly what you are doing, how you view it and why (proove to yourself ) that is makes sense mathematically, sensibly and that it works well in the market.
Understand there is a big big difference in viewpoints of risk...... eg; you may think you have zero risk, but what then is your gap risk, what is your actual exposure..... dont forget most futures contracts are actually highly leveraged.
Your comment "so you enter with another 2 lots (which gives you total 1% risk now)" I would say you have some confusion.....
You determined that you would risk 2 contracts based on 2% risk, just because you had some unrealised PL does not change this.
Are you going to base everything off you original stake going forward, or are you going to trade the equity as you have more or less PL? How soon do you enter after the original trade, an ATR level, a PL level, on a time basis?
I understand what you are getting at but more info, thought and scenario analysis needs to be done for the whole process.

But lets just say you have entered really quickly, you have now bought 3 units (6 contracts) and you have all the stops at break even. What happens if there is a gap through the stops?
Also "guaranteed profit on 50% of the position" - 50% of what? the original stake, from where? There are also no guarantees in trading!

Best bet is to take something like Ninja trader or something that can easily show you the difference between what happens when you pyramid..... use a very simple model eg, a MAtrigger and then a continual pryamiding as it goes your way.... dont worry about what happens to the PL - look at the series of trades...... can you live with that?

[neutral]

I cant look at a clean message anymore.
There is an add covering part of the tekst always ????????????????????????? ??????????
This is very annoying!!!!!!!!!!!!!! and absurd.


http://www.forexyard.com/en/landingp...790&lp=2.5perc


Owner of TL, please aline the need to generate income more with consideration for the the members experience.

[snowbird]

Originally Posted by bakrob99 »

If I have consolidation (defined by me as 4 overlapping price bars, I won't take an entry until and break and trend continuation (either way) occurs.

bakrob,

appears you have a very simple method of defining consolidations.

just curious as to your definition of 4 overlapping price bars.

Do you mean 4 bars (3 of which are inside bars as compared to the 1st?

or do you just look at the last bar printed, and if any part of it overlaps the previous 3 bars you deem a consolidation and trade only breakouts of the high or low of this consolidation?

snowbird

[maxr]

Originally Posted by SIUYA »

....But lets just say you have entered really quickly, you have now bought 3 units (6 contracts) and you have all the stops at break even. What happens if there is a gap through the stops?...

Thanks very much for your comments SIUYA. I forgot to mention that I only day trade, and watch the chart most of the time I'm in a position, but I take the very good points you made, thanks. The problem for a new trader is that few trading coaches I've met appear to rarely think through these things thoroughly (hey, they have to find something they can teach easily), and most full time traders I've spoken to have found something that works 'well enough' for them, so don't continue to analyse it beyond that - maybe that's not such a bad idea

Max

[windsurfer]

I haven't seen this point before, so I'll mention it a see if anyone finds it interesting.

I traded for a while with a number of former pit traders. They all make their living by scalping, although each has a different strategy. They all have a basic strategy of taking a trend (e.g. bullish) and scalping in only 1 direction (e.g. on dips). They are of 3 types- changing the trend direction during the day; taking a trend direction for the day and only trading in that direction; and 2 traders who only trade on the short side. Surprisingly to me, the short only scalpers are the most successful. They usually lose on bullish days, although often they are even profitable then from shorting on overbought ticks, but they have always profitable and some even great days when the market falls.

[SIUYA]

MaxR - I think windsurfer makes some good points about doing one thing and one thing well.
Especially the shorting - I also know a couple of equity traders that only every short..... perpetual bears, they make money quick and fast and usually still make money in bull markets.

Dont get me wrong on the previous post, scaling in/pyramiding/stacking orders works and works well, but you really need to understand the various scenarios you can get into trouble, and really understand why you make or lose money.
I have seen a lot of styles and its often scary the variation between the risk assumed and the actual risks in a disaster.
If you are pyramiding while day trading, you effectively are just looking for trend days. Again I would look to test and see if your setup is good at picking these, or you have some other measure to help minimise the losing days when there is no trend.

Its actually something I have been working on, but more longer term....thanks for a couple of recent threads (thank you Daedalus ) they are topical. like every trading style there is usually a trade off with regards drawdowns, required capital and how far to run things.
Do a test....look at the various scenarios.... really understand what suits you.

[bredin]

"I tried that and it doesnt work"

Most annoying phrase on a forum.
Or in life.

"I tried" is a phrase used by losers in order to make themselves feel better about losing, a way to divert the cause of failure onto something other than themselves.

What they mean to say is "I made a few trades and got it wrong, so I quit."

Scalping does work, there are a myriad of methods (some better than others) that produce long term positive results with practice.

The method taught to me to scalp on M5 also works on H4, which I am now trading exactly the same way except with less of my actual money on the table at any given point, a slightly tighter stop, and less intense chart time.
To clarify, if my M5 risk was 10 pips, on H4 I have a smaller lotssize and so only risk 3-5 pips for gains of 7-10 pips. I may not be entirely clear, but guys that can calculate risk will be able to work it out
Think of it as scalping in slo-mo

G.

[TheRumpledOne]

Originally Posted by klatchers »

1)Now the guy who posted that initial quote of his results and compounding i'm pretty sure is legit... Another guy who uses a similar philosophy is the loved and hated Avery also known as TheRumpledOne and his Never Lose Again threads that lets be honest, have been posted on every trading forum under the sun and threads have typically gone to hell quickly due to a combination of stated success, thread title, the typical bantering about risk: reward, and avery's very combative personality.

But all of that aside - I think hes legit and is making serious money. I mean the guy got his group of disciples to meet in Monaco for the F1 grand prix this year.... I don't care which way you slice it that city is one of the most expensive in the world and the most expensive time of the year there is for the F1 race. Somehow I don't think he footed the bill from his donational indicator payments.

Combative? Me? I never hit first. But I don't turn the other cheek and that's what gets me banned. Usually, the instigators are part of the in clique and don't get banned for violating forum rules when they attack me.

When I look back over the years I have been posting, I have to chuckle at all those who have hurled insults my way. Why anyone would take issue with what I do is beyond comprehension. A forum is like a buffet - take what you want and leave the rest. If you don't like a certain dish at a buffet, you don't spit in it, do you? So why trash someone's thread just because you don't like it?

BTW: Monaco was nice to visit but don't think I want to live there. It is too noisy. Next year, I am thinking having the pirate gathering at the 24 Hours of Le Mans.