Hi,
Averaging down is a strategy that is used to lower the average entry price of a trade, so it become in average better price.
As a programer, after 3 yrs experience in automating trading and testing...
I have come into conclusion that,
averaging down is profitable strategy!
but, with the
following condistions:
1. set 1st trade with 20% of regular lot size, SL and TP levels.
2. if trade goes agains you, set 2nd trade with 30% of regular lot size, cause the stoploss is closer
3. if trade goes agains you, set 3rd trade with 50% of regular lot size, cause the stoploss is closer
4. Set Same SL/TP : all trades have same stoploss, take profit levels like 1st trade
you can use buy limit or sell limit after 1st trade.
Advantages compared to 3 trades * 33% of regular lot size in same price:
1. %DD is reduced.
2. total profit is bigger. (backtesting proof)
3. Average Pips per trade is bigger.
want to hear your opinion.
Don't forget to vote ^ above ^ :-)
Averaging down is a strategy that is used to lower the average entry price of a trade, so it become in average better price.
As a programer, after 3 yrs experience in automating trading and testing...
I have come into conclusion that,
averaging down is profitable strategy!
but, with the
following condistions:
1. set 1st trade with 20% of regular lot size, SL and TP levels.
2. if trade goes agains you, set 2nd trade with 30% of regular lot size, cause the stoploss is closer
3. if trade goes agains you, set 3rd trade with 50% of regular lot size, cause the stoploss is closer
4. Set Same SL/TP : all trades have same stoploss, take profit levels like 1st trade
you can use buy limit or sell limit after 1st trade.
Advantages compared to 3 trades * 33% of regular lot size in same price:
1. %DD is reduced.
2. total profit is bigger. (backtesting proof)
3. Average Pips per trade is bigger.
want to hear your opinion.
Don't forget to vote ^ above ^ :-)