First entry usually wrong!?

[Rambo35]

In general your first entry level is never right and the price keeps moving against your analysis. Sure, sometimes you get it just perfect. I have noticed that in most cases your first entry is usually wrong which is why I advice against placing only one order.

I always have more than one entry level as it is natural to not time the trade right, which is why I always enter my trade with 0.01 lots and after that I place a ‘real’ order. It can reduce your risk and shifts the reward ratio more in your favor.

 

[Enivid]

It is always hard to pick a perfect bottom or a perfect top. Considering the Forex market volatility you will often get some pips of loss before your winning trade will enter a more or less profitable zone.

 

[Rambo35]

Yes, that is true. It is just part of trading which is why I have multiple entry levels as for me it reduces risk to a certain degree.

 

[ezrydn]

Rambo,

I'm glad to see you feel my idea of "checkpoints" is valid. LOL

 

[Easy Trader]

Yes, that is true. It is just part of trading which is why I have multiple entry levels as for me it reduces risk to a certain degree.

If your wrong it raises your risk. 😕

 

[Rambo35]

If your wrong it raises your risk. 😕

No, it does not. Let's assume you trade 1.0 lots and have one entry level. Your total exposure is 1.0 lot to your trade. I may have five entry levels starting at 0.01, then 0.04, 0.15, 0.30 and 0.50 for a total of 1.0 lots. Either outcome of the trade you have reduced your risk at least to a certain degree.

 

[Easy Trader]

Scaling in is a myth, each trade is a individual trade and risk to its own. When scaling in is done on a swing trade time scale it chokes off profit and multiplies the spread/commisions in your case x5 on the same trade bias. On a long term it is better to just be right or wrong. With scaling, when your right you may only collect 50% of a potential 1.0 lot position on average, when you loose you may only pay out 50% of the 1.0 lot loss but also pay off the broker 5-6 times. If it helps alittle bit more when your right you better believe it hurts alittle bit more when your wrong, its the nature of trading. Add in a string of months where the trader profits 30% or 1 lot and losses 50% of 1 lot on average, he/she may have many more winning trades on paper and be negative in the account. Investors do it especially in equities, usually with a long term between entries, but they are still placing individual orders. They just feel better when a loosing position is eating profits from a earlier position. The "oh well its the houses money not mine" mentality. I would pick my best entry point and widen my stop size to accommodate for market noise.

 

[Master Forex IB]

My first entry was not wrong I made good profit in it. I was happy to hve a good profit in first trade but it make me more confident . I try to do risky trading in next move it causes a great loss for me. new traders need much analysis and thing again to enter in market.

 

[Rambo35]

Scaling in is a myth, each trade is a individual trade and risk to its own. When scaling in is done on a swing trade time scale it chokes off profit and multiplies the spread/commisions in your case x5 on the same trade bias. On a long term it is better to just be right or wrong. With scaling, when your right you may only collect 50% of a potential 1.0 lot position on average, when you loose you may only pay out 50% of the 1.0 lot loss but also pay off the broker 5-6 times. If it helps alittle bit more when your right you better believe it hurts alittle bit more when your wrong, its the nature of trading. Add in a string of months where the trader profits 30% or 1 lot and losses 50% of 1 lot on average, he/she may have many more winning trades on paper and be negative in the account. Investors do it especially in equities, usually with a long term between entries, but they are still placing individual orders. They just feel better when a loosing position is eating profits from a earlier position. The "oh well its the houses money not mine" mentality. I would pick my best entry point and widen my stop size to accommodate for market noise.

We can agree to disagree on this topic.

 

[ezrydn]

Add one more to the "Disagree" List.

 

[Fxpipper]

Sorry but got to agree with others on scaling - which if you think about it makes more sense when the indicators go awry - which happens when things go volatile, e.g. Fed summer's bar and the election.
And FWIW, given a volatile scenario, scaling makes more sense rather than dump all the apples in one cart and wish for the said cart to drink red bull and sprout a pair of wings..

 

[Easy Trader]

Fair enough guys. Have at it!

 

[Rockefeller]

No, it does not. Let's assume you trade 1.0 lots and have one entry level. Your total exposure is 1.0 lot to your trade. I may have five entry levels starting at 0.01, then 0.04, 0.15, 0.30 and 0.50 for a total of 1.0 lots. Either outcome of the trade you have reduced your risk at least to a certain degree.

Good advice 🙂