Here's how MightyOne made me a profitable trader

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prochargedmopar
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Re: Here's how MightyOne made me a profitable trader

Postby prochargedmopar » Wed Dec 22, 2021 3:26 pm

What happened to John?
#1BODY in direction of profit #2INCREASE lot size Obsessively
My Losses cause me Great Laughter!
Trading Bible here> therumpledone/the-ideas-that-i-trade-by-t3256/page1670

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Re: Here's how MightyOne made me a profitable trader

Postby BambinoFlex » Wed Dec 22, 2021 3:30 pm

TheRumpledOne wrote:
BambinoFlex wrote:

#2 Finally makes sense. Thank you for sharing this. I don't see any more posts but hope all is well.


Please elaborate. Thanks.


If you open a long position, stop loss is the low of day. Total risk is $10. As the day expands higher, you decide to move your stop loss up. Let’s say your current risk is now $5. Now you can add to to your long position with a new long position at $5 risk. If trade turns around and crashes south, your total risk is $10. Same as when you first opened your first trade.

If the day keeps going higher, “in the direction of profit” then each pip is now worth more because you have two positions open.
- - - -


The premise is that you’ve caught the right direction and if price is making higher highs, then keep adding, but only once your stop loss or your risk will be the same as when you first started.
"If you're wrong, guess what...thats TRADING"

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TheRumpledOne
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Re: Here's how MightyOne made me a profitable trader

Postby TheRumpledOne » Thu Dec 23, 2021 2:43 am

BambinoFlex wrote:If you open a long position, stop loss is the low of day. Total risk is $10. As the day expands higher, you decide to move your stop loss up. Let’s say your current risk is now $5. Now you can add to to your long position with a new long position at $5 risk. If trade turns around and crashes south, your total risk is $10. Same as when you first opened your first trade.

If the day keeps going higher, “in the direction of profit” then each pip is now worth more because you have two positions open.
- - - -


The premise is that you’ve caught the right direction and if price is making higher highs, then keep adding, but only once your stop loss or your risk will be the same as when you first started.


This is where I get "lost".

Let's fill in all of the blanks.

Your position size is 0.10 lots (1 mini) at $1 / pip.

You place a 10 pip stop loss. You are risking $10.

Let's say price moves up 10 pips. So you have a floating profit of $10. Now if you add another mini lot, your stop would be at your entry - 5 pips. That would keep your risk at $10.

Something is missing because as I see it, your stop-loss is approaching 0 pips as you add to your position.
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Re: Here's how MightyOne made me a profitable trader

Postby BambinoFlex » Thu Dec 23, 2021 3:04 am

TheRumpledOne wrote:
BambinoFlex wrote:If you open a long position, stop loss is the low of day. Total risk is $10. As the day expands higher, you decide to move your stop loss up. Let’s say your current risk is now $5. Now you can add to to your long position with a new long position at $5 risk. If trade turns around and crashes south, your total risk is $10. Same as when you first opened your first trade.

If the day keeps going higher, “in the direction of profit” then each pip is now worth more because you have two positions open.
- - - -


The premise is that you’ve caught the right direction and if price is making higher highs, then keep adding, but only once your stop loss or your risk will be the same as when you first started.


This is where I get "lost".

Let's fill in all of the blanks.

Your position size is 0.10 lots (1 mini) at $1 / pip.

You place a 10 pip stop loss. You are risking $10.

Let's say price moves up 10 pips. So you have a floating profit of $10. Now if you add another mini lot, your stop would be at your entry - 5 pips. That would keep your risk at $10.

Something is missing because as I see it, your stop-loss is approaching 0 pips as you add to your position.



In your example, your first position would have been moved to break even. Your second position now opened, with stop loss at 10 pips.

Let’s say that as soon as the second position is opened, market reverses completely, triggering your stops (since they’re technically the same)

Results are:

1 Position - 0 pips earned. 2 position - 10 pip loss. Total money lost is $10 aka your original risk, not accounting for swaps or spreads to keep it simple.

So you managed to stack without increasing risk. The reward though will be larger.

I don’t understand when you said “add another mini lot, your stop would be at your entry - 5 pips.”

Your second position would have a stop loss of -10 not -5. You wouldn’t have 2 different stop loss positions.
"If you're wrong, guess what...thats TRADING"

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Re: Here's how MightyOne made me a profitable trader

Postby BambinoFlex » Thu Dec 23, 2021 4:10 am

prochargedmopar wrote:What happened to John?


Don't know, last time he was online was the same day he posted about his father. It's been years though.
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Re: Here's how MightyOne made me a profitable trader

Postby TheRumpledOne » Thu Dec 23, 2021 3:32 pm

BambinoFlex wrote:In your example, your first position would have been moved to break even. Your second position now opened, with stop loss at 10 pips.

Let’s say that as soon as the second position is opened, market reverses completely, triggering your stops (since they’re technically the same)

Results are:

1 Position - 0 pips earned. 2 position - 10 pip loss. Total money lost is $10 aka your original risk, not accounting for swaps or spreads to keep it simple.

So you managed to stack without increasing risk. The reward though will be larger.

I don’t understand when you said “add another mini lot, your stop would be at your entry - 5 pips.”

Your second position would have a stop loss of -10 not -5. You wouldn’t have 2 different stop loss positions.


I did not understand the stop would be moved to breakeven for entry #1.
IT'S NOT WHAT YOU TRADE, IT'S HOW YOU TRADE IT!



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Re: Here's how MightyOne made me a profitable trader

Postby BambinoFlex » Thu Dec 23, 2021 3:51 pm

TheRumpledOne wrote:
BambinoFlex wrote:In your example, your first position would have been moved to break even. Your second position now opened, with stop loss at 10 pips.

Let’s say that as soon as the second position is opened, market reverses completely, triggering your stops (since they’re technically the same)

Results are:

1 Position - 0 pips earned. 2 position - 10 pip loss. Total money lost is $10 aka your original risk, not accounting for swaps or spreads to keep it simple.

So you managed to stack without increasing risk. The reward though will be larger.

I don’t understand when you said “add another mini lot, your stop would be at your entry - 5 pips.”

Your second position would have a stop loss of -10 not -5. You wouldn’t have 2 different stop loss positions.


I did not understand the stop would be moved to breakeven for entry #1.


The reason entry #1 has to be move to break even is because in your example, entry #2 is opened after 10 pips of floating profit.

Let’s rerun the example. Entry one is opened. Risk is $10 or in pips, 10 pips with the mini lot ($1/pip).

Your trade moves in your direction. After 10 pips of floating profit, you decide to open trade #2. BEFORE you even open trade #2…you already know that you need to keep your risk at $10. Since trade #1 still has a stop of ten pips, your risk is still $10. So you move your stop to break even. Now, your open risk is $0 (not accounting for slippage).

Since your risk is now $0, you can now proceed to open trade #2 at the current price where you have $10 floating profit. You want to keep your risk at $10 so trade #2 now has a stop loss of 10 pips.

Now you have 2 positions opened but risk is still $10, same as your original position. If price continues in your direction though, the reward is much larger now. If you’re wrong, you simply lose your $10
"If you're wrong, guess what...thats TRADING"

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Re: Here's how MightyOne made me a profitable trader

Postby TheRumpledOne » Fri Dec 24, 2021 4:06 am

BambinoFlex wrote:

The reason entry #1 has to be move to break even is because in your example, entry #2 is opened after 10 pips of floating profit.

Let’s rerun the example. Entry one is opened. Risk is $10 or in pips, 10 pips with the mini lot ($1/pip).

Your trade moves in your direction. After 10 pips of floating profit, you decide to open trade #2. BEFORE you even open trade #2…you already know that you need to keep your risk at $10. Since trade #1 still has a stop of ten pips, your risk is still $10. So you move your stop to break even. Now, your open risk is $0 (not accounting for slippage).

Since your risk is now $0, you can now proceed to open trade #2 at the current price where you have $10 floating profit. You want to keep your risk at $10 so trade #2 now has a stop loss of 10 pips.

Now you have 2 positions opened but risk is still $10, same as your original position. If price continues in your direction though, the reward is much larger now. If you’re wrong, you simply lose your $10


Thanks. That clears things up.
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Re: Here's how MightyOne made me a profitable trader

Postby BambinoFlex » Fri Dec 24, 2021 2:37 pm

Im glad, it’s obvious but it wasn’t obvious to me until I read it on this thread.

For those reading, your reward is what truly takes the trading to a different level.

For example, I opened 1 position on AUDUSD, target is weekly R1, risk was around $7.50. Reward was around $21. Not bad nonetheless, but the second day I added another position. Granted, I could have added a larger position since my original trade had a stop loss above break even, and still keeping my risk the same but I didn’t and opened the same position size with a similar risk of close to $7. My target was hit in NY, total profit was close to $50 with both positions but my risk was always $7.50 (in this case less since the other trade had a stop in profit).That’s when I “saw” what MO was talking about in regards to stacking. It leverages the Risk/Reward toward you. This being that you already have a trading plan of course. I’ll see what else comes from this new skill and see how it works for me, but the numbers make sense.
"If you're wrong, guess what...thats TRADING"

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