In today’s episode, you’ll discover how to average into your winners (without destroying your profits).
So go watch it right now...
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Check out my FREE trading strategy guides
#1: The Ultimate Guide to Price Action Trading: https://www.tradingwithrayner.com/ultimate-guide-price-action-trading/
#2: The Monster Guide to Candlestick Patterns: https://www.tradingwithrayner.com/candlestick-pdf-guide/
Check out these TOP trading videos
#1. Ultimate Forex Trading Course for Beginners: https://www.youtube.com/watch?v=RqwTcg0EuJU
#2. Support and Resistance Secrets: https://www.youtube.com/watch?v=PuboYnBc0t8
#3. Ultimate Candlestick Pattern Trading Course: https://www.youtube.com/watch?v=C3KRwfj9F8Q
#4: Price Action Trading Secrets: https://www.youtube.com/watch?v=eddj9v1CfA4&t=2s
#5: MACD Indicator Secrets: https://www.youtube.com/watch?v=eob4wv2v--k
And finally...
If you want to level-up your trading and beat the markets, then check out Pro Traders Edge: https://www.tradingwithrayner.com/pte/
So go watch it right now...
👇 SUBSCRIBE TO RAYNER'S YOUTUBE CHANNEL NOW 👇 https://www.youtube.com/subscription_center?add_user=tradingwithrayner
Check out my FREE trading strategy guides
#1: The Ultimate Guide to Price Action Trading: https://www.tradingwithrayner.com/ultimate-guide-price-action-trading/
#2: The Monster Guide to Candlestick Patterns: https://www.tradingwithrayner.com/candlestick-pdf-guide/
Check out these TOP trading videos
#1. Ultimate Forex Trading Course for Beginners: https://www.youtube.com/watch?v=RqwTcg0EuJU
#2. Support and Resistance Secrets: https://www.youtube.com/watch?v=PuboYnBc0t8
#3. Ultimate Candlestick Pattern Trading Course: https://www.youtube.com/watch?v=C3KRwfj9F8Q
#4: Price Action Trading Secrets: https://www.youtube.com/watch?v=eddj9v1CfA4&t=2s
#5: MACD Indicator Secrets: https://www.youtube.com/watch?v=eob4wv2v--k
And finally...
If you want to level-up your trading and beat the markets, then check out Pro Traders Edge: https://www.tradingwithrayner.com/pte/
Hey hey, what's up my friend, so welcome back to today's episode. So in the previous episode we spoke about how to enrich in to your Doozers right and today we are taking things in the opposite direction, right now to average into your winners. So everything into your window, so it simply means that you buy more shares. You buy more whatever you need to you're trading right as the price moves in your favor okay, but before we talk about how to do it right, I first and foremost want to share with you how not to do it so many traders they get excited at.
Oh, you know you buy some shares of Amazon at $ 50 and let's say the price goes up a dollar 50 cents or whatever you can excited. Oh, let me buy more. I know the market is here: it's moving up higher strong momentum. Let's buy.
Let's make more money caching, but the problem with this right is a yes right. The market is moving in your favor and if you buy or if you scale it you're winners too early. What happens is that when a pullback comes, you might lose more than you expect. For example, let's say you have a thousand shares of Amazonian $ 50 and it moves up to fifty one dollars.
You buy another thousand shares so now, you're trading 2000 shares of Amazon. If Amazon drops one dollar, that's a lot of potentially $ 2,000 to you. Okay, so be careful right with averaging in to your winners too early, so you might be thinking okay, okay, right now, so how should I go about it? Okay, so let me share with you a few things to take note of number one you want to have at least right to are in open profit. So what I mean by this is let's say: you are trading, let's say some shares of McDonald's right, some McDonald's cheeseburger, so you bought McDonald's, let's say at $ 40 and you have a stop loss at $ 25.
So your risk right when trading McDonald is $ 5 per share. So when I see right, you want to have a profits of at least two are. It means that you want to make at least two times your initial risk, so your risk right is $ 5. So two times your initial risk is $ 10, so McDonald has to go up to at least $ 50 right from 40 to 50 right before you consider scaling into your winners, and the reason for doing so is because now you have some buffer open profits buffer.
So if the market - let's say you know if it does reverse against you, if it doesn't make a pullback, you have open profits to play with and that's very important. Okay. So when you want to average into your witness, you want to make sure that you have some buffer of open profits before you even consider trying to attempt it. That's the first thing.
The second thing - okay, just because you have open profits, doesn't mean that you are you. Are you no king or whatsoever because, as we have discussed earlier, if the market would move against you, you are now holding even not a larger position size. So you have to be careful right with how many shares you buy. So let's say initially, you bought McDonald's at $ 40. A thousand shares - and, let's say now, McDonald, is trading at $ 50 a share now you're up some profits, a profit of two are so you want to buy more shares of McDonald's. So how many shares should you buy? So a very rough general guideline. I have for you is this right: try not to risk more than one-third right of your initial position, so if initially, you bought a thousand shares of McDonald, your second tranche or your or you're scaling into your winners. Your second attempt to buy Moe mcdonnell's should not be more than one-third of your initial position size, so that means that you shouldn't now buy more than three hundred and thirty three shares of McDonald, which is about one to your initial size.
The reason for this is simple: when you scale into your winners right, you want to imagine it like a pyramid right, your base is heavy, so your base is your initial position size that you enter initially the thousand shares of McDonald and as the share price move In your favor, you want to add, in smaller position, size right relative to the first position you had this way. If the market does a pullback right, because you are having a pyramid structure, your base is strong right, a pullback, even if it occurs right, you can still. We stand it, because your your every share price right. It's a lower because of the fact that you head most of your positions, bought on the first attempt and the first wrench okay.
So this is important right when you average into your windows. You want to reduce your size, do not put in the same size or even more, because when a slight pullback comes right, that's it it's gon na be painful. You will be hurt so there's the second thing you share with you and the turn and final thing is that okay, this might be a little bit more fee, just my opinion, okay, when you scale into your witness, you want to do so on a pullback. Why, on a pullback, because that's where the market right, let's say you buy on a pullback, that's where the market could possibly start to reverse up higher and when it is it reverse up higher you not have a new swing low, a swinging point on your chat Right that you can reference to to set your stop loss, does it make sense? So if that swing load, that streamed point is broken right, you can exit all your positions compared to chasing a breakout scaling it into your winners, as the market breaks up higher.
There's. No relevant point to set your stop loss there could be, but it would be very far away right from your initial entry price so preferably if you want to scale into your winners, do so on a pullback. This way right, you can reference. The recent swing low right to set your stop loss for all the position that you have right for all the different entry points that you had earlier all those initial positions.
The second attempt at a time whatsoever can just go below the most recent swing low. Okay, so just a quick recap right: if you want to scale into your winners, number one have only some open profits. Some buffer of it is to are of open profits. Number two: you want to reduce your position. Size, okay, reduce it, as you add into your winners. This way you have a more stable base right. Remember the premium structure that I just mentioned earlier and finally right, if you can do so on a pullback all right, this is where you can. You know take advantage of the mixed potential swing that comes up higher and if it doesn't occur right at least you know you have a new reference swing swing point right now you can set your stop loss right for all your positions, for all the tricks that You have you know skilled in so far, so with that said right, I have come towards the end of today's training.
Today's a episode. I wish you good luck and good trading. I will talk to you soon. You.
If any of you all are looking for more tips and tricks regarding trading forex, feel free to check me out! I'm uploading multiple times a week 🙂
Hi Rayner! Do you have a trade management video of some kind, that helps manage the trade as it moves up? Like strategies for scaling out, or taking some profits off the table and moving the stop up? Thanks for the videos.
Rayner, can you please offer a video on all the different trading options for trend traders. i.e. bitcoin, forex, etc…
Hello Rayner,
What are your thoughts on Crude Oil currently? I've identified that it has formed a nice double bottom and is currently on the verge of moving even higher past $29 after a nice consolidation with higher lows indicating buyers are willing to buy higher. Also it has recently broke above and I can't wait to see what happens next week. However, what would you wait for to get a buy position in? I can't identify the Entry point under the TAE framework so does that mean that I should just sit out?
Hi Rayner,
This Is Datta from Mumbai , watching all your U tube video on regular basis. Awesome, Amazing and very Informative.
Just need your guidance please.
I trade in options strategies like bull call spread and bear put spread looking at the trend to gain few points like 10 to 15 .
How do I strengthen my strategy , please guide me with you expert view please.
kind regards, Looking forward to hear from you..
Datta
Thanks Rayner. You have given me better idea. If really reach 2R, can we reduce half position first then only add 1/3 of initial position or half of position? I like your chicken voice 🙂
Sir u r really sniper guy of forex….. thanks alot may Allah give u healthy wealthy and happy life…
Please sir one day make a video on COT data.. from where we take this data and how to use it… if u make video on it .. i shall be very thankful to u…❤❤❤❤❤ please reply me… i never find a video about that one topic clearly…
you the best bro,,, just a few days watching you with my losing trades because of luck of knowledge on trading,,,and I almost giving up to proceed to learn more on it, untill I keep back watching to your videos and now I got all clear for me that from you I all understand the strategy of using moving average,suport and resistance..for now they are enough for me to start to practice with small amount. you brilliant bro for your good teaching ,keep it up..god bless you.
BERNIE
Rayner can you do a video on COTT reports. I know its a powerful tool to see where hedge funds are going long or short and direction of the market. Do you use these reports in your trade entries?
Very valuable info Rayner. I have watched 6 of your videos already and intend to continue each day. Appreciate what you are doing. Thanks! 🙋🏻♀️
Hi Rayner..I am from India..big fan of urs..shared ur videos with my colleagues..can you make some videos on Option trading in Nifty 50(indian induces)
I've been watching a lot of your videos lately, and was interested in your opinion on new traders getting into forex. I'm currently trading penny stocks but the PDT rule exists. Would swapping to forex trading be a viable option given the increased risk, or is it possible for beginner's to not blow up forex account and profit with proper research and risk management??
Hey Hey Rayner!!. This is lovely and very helpful. You have your earlier video as well on <scale in> but this comes as refresher. Thank you.
This videos are excellent. I’ve learned so much in the last week. Thanks so much Rayner!
Rayner,
What do you think about increasing position size by scaling into winners even though you may have already risked your maximum percentage you've allowed for that trade?
for example: risk allowance = 2% of account… the position increases in value and you want to average into winners but you would be risking more than your 2% allowance. Do you do it or stick to your rules?
thanks! Sub'd for a while now!
My problem is I dont know when to sell, started investing and trading since the Beginning of March. Made some excllent purchases. Avg 30-100 returns but those returns quickly went down due to volatility. Looking back on the multiple time frame analysis, I prob should of sold it at resistance. But I'm picking up these stocks at bargain discount prices. The psychological premise tells me to wait for it to wait it out to previous covid 19 highs but I also feel like I should play the resistance and support during these volatile times to take in some earnings.
Please make a video of when to sell. I'm often conflicted between temp sales to long term holds.
Rayner, you are a beast my man!
Love all your content, the bonus is that you know your s**t!
Hai Rayner is a Raining money always, Rayner pl make one videos of day trading
(Indraday)
I love you Rayner Teo for your constant teachings that you've made available for free.
Number 2 & 3 is really helpful. The few times I added onto my position is exactly the opposite of this. Same lot size and on a breakout. Thx a lot for the advice
Please bring back videos with diagrams to illustrate your explanation. 🙁 still good content tho. Keep it up
Rayner if you could talk about hidden seller a little bit. That would great.. Hidden seller impact on price fluctuation and how to identify on Level 2.
This is the most valuable piece of information you have given..I am following your videos.. and comparing to my real trades stratagies.. This one indeed is the best to stay put and maximize your profit.. Thank you rayner..
hai rayner, many your video I was wacthing.. I want to ask your video about inside bar strategy, how you know the price was respected the ema 10? thank you
Rayner great content as usual!
But I have one request. Please do a video on how to get filled. I don't understand spread and that's why I don't get filled.
Please do a video on this topic
Thanks Rayner, am happy for subscribing too your channel cause you have thought me a lot. Much love for you bro
Thank you so much sir. you are giving your precious time to us.
Hello bro Its being a long time I wanted you to be my mentor
Can you please send me your email address
Or your whatsapp number
I personally don't like averaging into trades. It's complicated enough as it is (for me anyway). Get good at the basic routines and know them like the back of your hand first before tackling something more risky and having more information that can paralyze you and thus lead you into complacency and blindness, on top of any existing FOMO and greed, and general unrealistic expectations from not improving your understanding of the foundations of the game. Again, the old adage of not running before learning how to walk. And not just that… but also then learn to WALK WELL. Otherwise it can kill you and knock you out really painfully.
Can you do a video on how to find high probability trade setups