Averaging down can work, but I wanted confirmation that the market was going to move back up.

Scaling in / out works both ways, you can add to the trade at a higher price and the compounding affect of more contracts will increase your profits. It may seem counter-intuitive, but I do it quite often.

I will also form a core position and trade in / out of it and add to it for both price improvement and scaling at a higher price if I feel the trend or premise for the trade is still intact.

I'd have to go back to my journal for the exact timing and rationale for the trade, but I can assure you it was a profitable endeavor.

Yeah I see that it was profitable but I'm just saying that it was risky and not good trade management, too much risk for little reward given the context. You took less reward on your first contract (if we give that trade the highest sell) than the risk incurred, especially since you sat through a serious bear spike. If the market was going to rebound higher why did you sell out so soon then?

Let's say the percentage up 5 points to down 5 points was 50/50, you took less reward than risk, in a 50/50 market that is unprofitable. In this case the bull spike a little before 1pm was good for the bulls, but the fact was that the bears were in control for much of the day and the percentage of success for shorts was higher than 50%, especially up there - the market did fall after your exits.

Just saying, I get into these issues also, it will affect your trading, they might work once in a while but long term this was not the best trade management and is not profitable. Maybe if you added on a measured move below the 2354-2351 trading range which would have gotten you to the low, there would have been a better place to scale in.

Another thing if you wanted confirmation that the market was going back up (premise for the higher second long entry), then why were you in the long to begin with, why not wait for that second entry and avoid the draw down from the initial position? I'm just bringing this up, because this is an informational thread and the content in your post while it worked out, in practice can lead a beginner to get into a lot of trouble

Posted below is the full graphic, you'll see the risk / reward in terms of loss / gain were exactly the same.

I'm not going to argue trade management or trade styles with you, how you trade is your biz and vice versa.

I will defend one part, I waited through a liquidation break and was lightest when the trade was against me and heaviest when it was in my favor.

Ideal trade? Not particularly, but it worked out and from a P/L standpoint it was 1 to 1 risk versus reward.




Full day screeny for context.