I have experienced two problems with this strategy (1) how to cut losses - (2) when to add to a bad position - for the first - the problem is that the nature of the idea is to never exerience a loss on a trade - if one trades long enough eventually one has to make this choice - how when everything you have is tied up in being right about the original trade set-up do you make this choice. My biggest losses came about from having to stop because I couldn't handle the pain of the market moving agianst me for days.
On the second some of my best pay days have come by using this method as part of my trading plan - It is worth looking at when entering the market and looking where your stop loss is going and think about doing a limit entry instead of a stop loss. when you do that then you look at one more level of price action against you which then helps you see the larger market. The problem is doing this is can give you the yips - unable to pull the trigger - and throw you off your game.
Bottom line - doing this can work it requires one finding the depths of their soul. That area of self we seldom explore - our core needs and fears and learning to live with them fully expressed.
On the second some of my best pay days have come by using this method as part of my trading plan - It is worth looking at when entering the market and looking where your stop loss is going and think about doing a limit entry instead of a stop loss. when you do that then you look at one more level of price action against you which then helps you see the larger market. The problem is doing this is can give you the yips - unable to pull the trigger - and throw you off your game.
Bottom line - doing this can work it requires one finding the depths of their soul. That area of self we seldom explore - our core needs and fears and learning to live with them fully expressed.
I make money anywhere in the world by taking orders