Add-On Stop-Loss

[Aletheia]

Hi Immy

When adding-on during a continuing trend, how does one manage the stop-loss for the add-on?

- Assume my entry was 0.5% (0.1 lot) on Signal 1. The trend is confirmed and at the first AIMS box break I add-on. I want to add 1% so presumably I add 0.2 lots. However, I am not aware of instructions to enter a stop for this add-on. Is this a correct interpretation of the rules?

- Would the stop in effect be either a 5 bar trail or a green-line stop out, on the basis that we are going with what the market wants and balancing some risk of the add-on with the cushion of profit already gained from the initial entry?

Many thanks...

[immy]

Hi Immy

When adding-on during a continuing trend, how does one manage the stop-loss for the add-on?

- Assume my entry was 0.5% (0.1 lot) on Signal 1. The trend is confirmed and at the first AIMS box break I add-on. I want to add 1% so presumably I add 0.2 lots. However, I am not aware of instructions to enter a stop for this add-on. Is this a correct interpretation of the rules?

- Would the stop in effect be either a 5 bar trail or a green-line stop out, on the basis that we are going with what the market wants and balancing some risk of the add-on with the cushion of profit already gained from the initial entry?

Many thanks...

Hi

good question.

Your Stop Loss for add on should be exactly where you'd have stop loss for your previous entry. so if you get an exit signal that's where you'd considering exiting. Which brings another question? what about risk and lot size, if your add on requires bigger stop loss than your initial stop loss you may have to lower your lot size to match the risk factor.

Note about performance monitoring: Using add-ons with variable lot size may take you into the territory where pip counting cannot be used as a performance measuring tool unless you use some mathematics.

Hope this helps.

cheers.

[Aletheia]

Thank you Immy.

That certainly does help. I feel comfortable with placing the stop at the same place as the initial stop, even though the add-on won't be as potent as one might like due to the reduced lot-size.

[immy]

Thank you Immy.

That certainly does help. I feel comfortable with placing the stop at the same place as the initial stop, even though the add-on won't be as potent as one might like due to the reduced lot-size.

There is a point here. when you enter at a certain level and then add on, add the two price levels and divide by two i.e. simple average .... so we gotta keep an eye on average price level. I don't like adding more than 2 times in fact hardly ever you'd see me adding on for the second time because it disturbs average price as compared to exit level. So in the end we'd look at average gain to get the accurate picture of our performance. in other words its all about average account growth. I've found that with add on's one can really improve growth levels. BUT and thats big BUT one must first remain profitable consistently for at least 6 months before deciding to add on. e.g. Grant has been trading the system successfully and consistently for more than 18 months still he does not even think about adding on? why? one reason would be, he's happy with his average growth rate per year and per month. etc etc

cheers

ps: the main goal is to grow your account!

[Aletheia]

Thank you Immy.

That certainly does help. I feel comfortable with placing the stop at the same place as the initial stop, even though the add-on won't be as potent as one might like due to the reduced lot-size.

There is a point here. when you enter at a certain level and then add on, add the two price levels and divide by two i.e. simple average .... so we gotta keep an eye on average price level. I don't like adding more than 2 times in fact hardly ever you'd see me adding on for the second time because it disturbs average price as compared to exit level. So in the end we'd look at average gain to get the accurate picture of our performance. in other words its all about average account growth. I've found that with add on's one can really improve growth levels. BUT and thats big BUT one must first remain profitable consistently for at least 6 months before deciding to add on. e.g. Grant has been trading the system successfully and consistently for more than 18 months still he does not even think about adding on? why? one reason would be, he's happy with his average growth rate per year and per month. etc etc

cheers

ps: the main goal is to grow your account!

That's definitely food for thought Immy.

I am actually studying the PTG Chaos home-study course presently and will trade it over the D1 TF in due course. Having read all three of Bill and Justine's books, I find myself extremely drawn to all aspects of the Chaos idea, especially the psychological perspective.

Ironically, I found the AIMS group at around the same time as I started the course.... Synchronicity!

I 'put AIMS on a back-burner' whilst I got into the course. I can now see very clearly that I will enjoy trading M1 and M5, with AIMS, for certain periods of my day too. It's helping my learning for both approaches by cross-referencing the reading.

My most important aim (apart from growing my account) is to be able to remain happy and relaxed with my trading style.

Thanks for your input.