Don’t add to losing trades | Crypto Craft

  • Don’t add to losing trades

    From blog.hycmlab.com

    This is a very common mistake, an easy trap to fall into. You add even more to the losing position with the thinking that the original loss will be covered over with an even greater reward. The danger is of overexposure to one market. The risk then becomes of even greater losses. Like staking everything on the outcome of one horse in the Grand National to cover over all the other losses in the months before. It may seem to work on occasion, but don’t be fooled by a favourable escape on the odd time. With this approach when it goes wrong it will be worse than it ought to have been. Don't lose all your hard-earned ... (full story)

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OnlineAddict
Sep 4, 2021 4:46am
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An article by a newbie for newbies. The subject is much more complex.
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NotAtrader
Sep 4, 2021 6:35am
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How do you know if the trade is losing or not in the first place?! It is a little bold to say “never add to a losing trade”. After the trade has gone wrong you have to re-analyze the situation and you need to make a new plan (add, hedge or exit). Sometimes you may find out that it is actually a good idea to add to your position when the circumstances allow that. As mentioned above - it’s all about risk-reward and MM.
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nAVIN2007
Sep 4, 2021 5:58am
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Quoting OnlineAddict
An article by a newbie for newbies. The subject is much more complex.

I agree..all about mm and what u wrote
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lance338
Sep 4, 2021 2:33am
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It depends how you look at it.

If the original trade was entered when the market turn was due this can be a valuable way of adding to a position at low or minimal risk.

It is all about risk-reward.

There is no such thing as a losing trade.

There are only informed or ignorant trades.
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OnlineAddict
Sep 6, 2021 7:37am
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Quoting Glastonburyk
I see so many traders do this. So-called martingale strategies that just take you into a deeper hole
Those are 2 separate things. Martingale means increasing lot size with every new trade, but you can also open the same sizes or even smaller ones with every new trade. And opening 10 trades at 1:1 leverage is actually safer than opening 1 trade at 1:10 leverage. The smaller trades give you a better average entry. But like I said...its much more complex, many variables here. Money management is the key.
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umbrella man
Sep 6, 2021 10:30pm
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Extremely BS article. Newbies be aware.
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AnniLi
Sep 5, 2021 9:39pm
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There is a useful word 'execution' which, in any market, it refers the process of acquiring your required stake. So if your are following a tranche or staggered strategy you welcome filling your stake at a lower price. The example given did not allow for that aspect. In addition, I agree with those commentators who refer to your decision making process and digest the news as time goes on, relative to your assumptions. Finally, if your process is technical rather than fundamental (or a mixture) it is still not clear whether you will make an error by buying at a lower price. But if you are still asking such questions then you probably belong on the practice fairway.
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Glastonburyk
Sep 5, 2021 10:26am
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I see so many traders do this. So-called martingale strategies that just take you into a deeper hole
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