AGG, EWT
AGG moved higher yesterday. We will wait for our exit signals to trigger.
EWT moved lower yesterday, but only by a penny. Per the direction of High Probability ETF Trading, you should have taken your second long position.
But since the price of EWT declined only by a penny, on future stock trades, I think I might modify the rules by buying additional positions only on a price decline (or increase on a short sale) of x % (add your own criteria, here). For me, that might be 2.5%. Of course, I would miss the additional profits should the etf move higher today or tomorrow. Conversely, my limited investment is protected should the etf move lower over the next several days – and I would be able to buy-in at even lower prices.
Let me know your thoughts…


These trades are based on the strategies found in the book by Larry Connors: High Probability ETF Trading.
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Seth, you are wise to be thoughtful and cautious about adding volume. Especially new layers that are not sufficiently “spaced” apart from the previous leg.
IMO, it is the size of positions – rather than the degree of a particular move – that usually causes serious hits to the accounts of most traders.
Some cautious traders develop rules or indicators that require the new leg to be moving in the right direction before adding on. This hopefully eliminates mindlessly trying to catch a falling knife or mindlessly trying to short the Space Shuttle.
RBB
Yes, I would agree that the size of the position is most important. Good advice!