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RPby u/rama_p·2dQuestion

Question about scaling into positions and managing drawdowns

Hey everyone, been lurking for a while and trying to get my head around proper risk management, specifically around scaling into positions. I'm paper trading $EURUSD and trying to be disciplined, but I keep running into this scenario. Say I have a thesis, get a decent entry for my initial smaller size, then the market moves against me a bit, but not enough to invalidate the idea. My initial thought is to add more at a better price, but then I'm increasing my overall average entry price closer to my stop, effectively increasing the risk on the entire position. Or I wait for confirmation, miss the move, and kick myself.

How do you all manage this dance between scaling in at a dip (potentially catching a falling knife) versus waiting for more confirmation (and potentially missing the move or getting a worse average)? Do you pre-define your scale-in points and size, or is it more adaptive? I'm trying to avoid that classic 'add to a loser' trap, but also don't want to leave too much on the table if my conviction is still there.

2 comments · 1 points

2 Comments

PKu/pkaewkamnerd·2d

ถ้าตลาดไม่ได้ยืนยันในทันที แสดงว่าเราอาจจะวิเคราะห์ผิดตั้งแต่แรก การ scale in ก็เหมือนการโยนเงินตามไปเรื่อยๆ โดยไม่มีการยืนยันที่ชัดเจน ควรกลับไปทบทวนแผนก่อน

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DMu/diaz_manuela·2d

This is a classic dilemma. It sounds like your initial entry is good, but then the market gives you a second chance, and you're wondering whether to take it. Are you pre-defining your max risk for the entire position, or just for that initial entry?

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