When Do You Add to a Position?

[mslk 10]

hi,

 

i'm an intraday stock trader and i've never had a problem cutting my losses. but i could use a little guidance when it comes to taking more advantage from my winners. i know one option is to add on dips. do you ever add to a position if it starts working right after you buy it? would love to hear from all intraday traders, regardless of instrument.

 

thanks

- mslk

[UrmaBlume 10]

hi,

 

i'm an intraday stock trader and i've never had a problem cutting my losses. but i could use a little guidance when it comes to taking more advantage from my winners. i know one option is to add on dips. do you ever add to a position if it starts working right after you buy it? would love to hear from all intraday traders, regardless of instrument.thanks

- mslk

 

In short term trading you add to winners at the end of a reaction, the beginning of the next action and only when you have enough equity in your position to move your stop to at least a break even on the first position and only after an initial move has proved your entry correct.

 

Averaging down or adding to a loser can't be considered in short term trading and probably shouldn't be considered in longer term trading.

 

Remember what Paul Tudor Jones said, "Losers add to Losers."

 

cheers

[mslk 10]

In short term trading you add to winners at the end of a reaction, the beginning of the next action and only when you have enough equity in your position to move your stop to at least a break even on the first position and only after an initial move has proved your entry correct.

 

Averaging down or adding to a loser can't be considered in short term trading and probably shouldn't be considered in longer term trading.

 

Remember what Paul Tudor Jones said, "Losers add to Losers."

 

cheers

 

when you say 'end of a reaction, the beginning of the next action', do you mean when the trend is in a consolidating phase? what, if any, indicators do have you found to be useful here to help identify this?

 

thanks

-mslk

[UrmaBlume 10]

Simply that most trends are a series of actions and reactions. Some of the reactions may just be pauses.

 

You get in, it goes your way - it comes back a bit. You add and move the stop.

[wrbtrader 10]

hi,

 

i'm an intraday stock trader and i've never had a problem cutting my losses. but i could use a little guidance when it comes to taking more advantage from my winners. i know one option is to add on dips. do you ever add to a position if it starts working right after you buy it? would love to hear from all intraday traders, regardless of instrument.

 

thanks

- mslk

 

It's simple...add only when you get another valid trade signal and manage each add independently. Also, only add to profitable positions. Further, if you're a consistently profitable trader...you can add to a losing position but the add must have been planned at a specific price prior to the trade entry.

[MadMarketScientist 11]

Trading decisions are based on all the variables involved, not just the stock's price movement. One variable, of course, is the time frame the trader is accustomed to. If you are a short-term, high-frequency trader, then you may choose to take small profits, or losses, several time per day. If you look at multiday time frames, then you should set price targets, for profits and losses both.

 

MMS

[Dutchie 10]

hi,

 

i'm an intraday stock trader and i've never had a problem cutting my losses. but i could use a little guidance when it comes to taking more advantage from my winners. i know one option is to add on dips. do you ever add to a position if it starts working right after you buy it? would love to hear from all intraday traders, regardless of instrument.

 

thanks

- mslk

 

Hi,

 

Using a simplified Elliott Wave count, I add to my positions at the end of waves 2 and 4 (also referred to as corrections or consolidations). However, not every chart shows easy to recognize Elliott Waves, but when they do it is awesome to trade the waves.

 

 

Once a Wave 2 or 4 is recognized, I go down to a 4 times lower timeframe. Next I will draw trendlines over the tops/under the bottoms of a wave 2 or 4. Once both the trendline gets broken AND the latest swing high/low are exceeded I add to my position. Stoplosses are to be put a few ticks below/above the before mentioned wave 2 or 4.

 

Hope this helps.

 

Happy Trading!

 

Cheers,

 

Peter a.k.a. Dutchie

[david77 10]

How does the fact that you own the stock enter into your decision to buy it (or buy more)? Do you think that the stock knows that you own it? Do you think that the stock trades differently because you own it? If I own a stock that is a winner, will that make your more likely to buy it? Or, does that logic only apply to stocks owned by you or your "inner circle"?