LOL HAHAHAHAHAHAHAHAHAAHAH LOL HAHAHAHAHHAHAHAHAH man this is a good laugh. You are sooo right. I know the smaller timeframe I use, the faster I can get rich quickly.
Hello volpri, Thank you for the post. After taking a Breakout LONG ES trade on the 5 minute chart with 1 ES contract aiming for a 4 tick scalp of $50, I have now scaled in 10 ES contract and market is reversing (failed breakout) not hold the XX EMA and breaking below the breakout area. My current unrealized profit for this trade is now -$10,000. Questions please: 1. When do I exit the trade holding 10ES contract? 2. How will I recover this drawdown $10,000 by aiming at 4 ticks per trade 1 ES contract? I will need 200 wins in a row to recover this drawdown. 3. Do you believe a human with one brain, can get 200 wins in a row? Thank you sir in advance for your post.
Hello Frederick Foresight, I will intelligently add to your post as well on the red After the trader (a human being with bills to pay from his/her trading) take the largest loss holding all those contracts, he/she now have to do something harder than circumcising a mosquito,...., recover that big loss before bills are due on the first of the month.
Show me the chart with your initial entries and scaling in. I have no idea why you decided to average down.
You are in 10ES contracts and down only 10K? You must have a gigantor bankroll. Well, you could exit the trade when you are approaching a margin call based on the performance bond requirements. You could also "lock in the loss" by taking 10 ES on the next contract in opposite direction, so you have time to breathe. Remember, man, most future contracts all move in the same direction across the medium term. ESPECIALLY equity futures. So being long one month and shorting another is a calendar spread. AND, you'll get a margin discount! Woohoo!
Hello Overnight, The point of my post was, there is not a human alive that can scalp +100 wins in a row, after taking a big loss of scaling in. All that scaling trading sounds cute in theory, until you take that big loss and you can not recover. Scaling in to losers sounds good, but as my grandmother use to say "Boy sit your black ass down with that bullshit, I see better than I hear"
Hello volpri, I tried scaling in price action scalp trading for about 4 months, and I failed miserably and lost alot of real money doing it. I know you and Al Brooks like that style of trading, but it did not work well for me. I do not like how Al Brooks does all this talking/teaching and can not prove anything. He sell people dreams. I am not sure why you and Al Brooks do not trade live and show traders how you trade since you like scaling into losing trades so much. Makes no sense to me at all. I will never talk/teach about something and do not prove it to traders with real money. That does not seem fair to me. I stated in my example, after holding XX contracts and you have to take that big loss, you will not be able to recover by scalp trading. Averaging into losing trades is just a mental way to make trader feel good day to day, by winning. Eventually the big loss comes, and trader will give up cause they know they will never be able get that big loss back. I need a $1,000,000 trading ES account to make it work. and $5 million in savings and all bills and debt paid And I do not have a $6,000,000 trading account. I will stick to setting my stop loss, and setting my profit target per trade. I have much respect for @Overnight for keeping his live trading journal win or lose. Thank you.
As with anything you have to know “when” to scale in. Not every trade is conducive to scaling into a losing position. Sometimes it is best to take the SL and even exit before the SL is hit. A trader has to really learn how the market probes back and forth, see that happening, and know how to capitalize on it by scaling into a losing position. Scaling in is not to make one feel better but it is used to increase probability of exiting a trade with profit. However, any time probability is increased usually risk is increased and reward is decreased. But not always. Sometimes by scaling in probabilty is increased, risk is increased, and reward increased dramatically on a subsequent further than expected favorable move after scaling in. If it were not working for me then it would be best to quit doing it or practice more a sim until I felt confident I could do it successfully.
As far as taking a big loss. On a scaled in position if I see it is wrong I will exit quickly and often go doubled up position size in the right direction and get back my loss quickly. However, that too is dependent on the context of PA and momentum (as this is scalping remember) because I may take the loss on the averaged down position then reverse and double up my position size and then get whipsawed after taking a doubled up second position. Sometimes it is better to just take the loss on the scaled in trade (or any trade for that matter) and wait for another trade. The probability of the next trade working has no bearing or connection to the previous loss. It is a fresh start with a fresh opportunity. Nobody is perfect in reading PA on a chart so hitting an exact entry exactly down to the tick and having no adverse subsequent move against ones position cannot be accomplished most of the time, although I have seen it happen often times. Getting the direction right but the timing a tad off is where I as a trader may have read the direction correctly but my timing being off a bit puts me in a losing position. So as the market churns back and forth then I may find I can average down increasing the probability of putting me in a position to exit making money. But obviously, if I read the direction wrong and find myself in an averaged down position AND still going in the wrong direction then I have to correct that mistake and QUICKLY or yes I will likely suffer a big loss wiping out all my previous profits I had made and had already locked in the same trading session.