Info!! Is It Proper To Add Together To Losing Trades?

There was about unintended but useful argument generated past times my recent ship service on merchandise management. The enquiry is whether it is e'er permissible as well as prudent to add together to a merchandise that has moved against you lot since your entry.

My reply to this is that I know real successful traders who add together to positions at to a greater extent than favorable prices, as well as I know many successful traders who never produce this.

What's clear is that adding to a merchandise *because* it's inward the red--simply equally a agency of trying to bail out a loser--is a risky as well as ill-advised strategy. Such a trader is adding to the merchandise to a greater extent than for psychological reasons than logical ones.

There are times, however, where I volition run across a merchandise alongside 1 unit of measurement (in my example a half-sized position) as well as volition add together a minute unit of measurement if the marketplace gives me a meliorate cost *and* if I regard that the deed against the kickoff unit of measurement is losing steam. If the whole merchandise gets stopped out, I tin easily alive alongside the results, because 2 units is non a high grade of marketplace exposure for me.

What's telephone commutation is that, inward such a scenario (and they are non mutual inward my ain trading), I'm adding because I regard chance as well as a shift inward marketplace strength/weakness that tin produce goodness me. I'm non adding to the seat inward fellowship to last made whole on a loser. Indeed, I don't persuasion such a merchandise equally "adding to a loser". The merchandise is exclusively a loser if I'm stopped out past times planned criteria. Rather, I'm adding to a practiced merchandise at a meliorate price.

But I never add together to losers, inward the feel of adding to a merchandise that has hitting my planned halt out point. It is oft such pocket-sized exceptions from dependent area that atomic number 82 to far larger as well as costly ones--much similar cheating on diets!

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Trading Rules as well as Trading Discipline

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