Whether it is trend-following or contrarian is meaningless

Going long or going short, either way it ends by which direction it moves up or down afterward

Profit should be extended and take profit or cut loss must be done, that’s all

Since you can’t target trends or ranges, waiting only results in a loss or profit

Trend = doesn’t appear

Range = steady losses

Steady losses, then big profit

Steady profit, then big loss

↑

If you offset these, you end up at zero; not worth doing

Zero plus spreads etc. makes it a negative game

Dow theory and wave theory are just traders’ Prospect Theory

“All of it is luck”

Prospect Theory = logic of just extending profits or waiting

It’s simply doing the opposite of traders who are doing the opposite; it’s occult

Only the Dow theory patterns appear

Pattern = cannot be quantified or programmed

Because it’s all the traders’ expectations and outcomes

“We’re just thinking up outcome-based scenarios”

Profit extension = too few chances with a single shot

Thus averaging down becomes mainstream; clearly, downward averaging down becomes mainstream

People stop winning when using stop losses

There’s no choice but to trade using margin calls and drawdown systems

Averaging-down logic is

Because the stop-loss range changes with the number of averages down

Zero-cut is the best way to cut losses

Thinking with Prospect Theory

It’s a condition not to be forced into a single loss completely

Then average down, take profit, move funds, reset repeatedly

All is hindsight; averaging down works better

Hindsight result = hedging or averaging down on both sides

In the end, whether a trend appears depends on the result

If you understand, you’d end at the loss limit without effort and assets would grow quickly

No need for manual trading; you can see trend logic is marginal in automated trading

If averaging down is a diverse logic, you don’t need to elevate it with stop-loss

In the end, if you lose, you must make up that loss with extra pips

Clearly, averaging down has the edge

If you can cut losses in the first place, averaging down is definitely better

The market direction is unknown; hindsight results

Therefore, basically take a hedged approach and keep averaging down on one side

If a trend emerges, just trade in that direction

If it retraces, hedge again with averaging down

Averaging down = mindset of retracement

If you think it will return, you’ll keep thinking it will return and end up in huge losses

Averaging down = should be fixed pips

Only 1:1 or 1:2 logic is largely meaningless

One shot = 20 pips

Averaging down = 50 pips

That’s the only way to manage

One shot

Losses infinite: profits infinite

But

If you average down

Your capital won’t last

Not unlimited losses, not unlimited profits

There is no absolute guaranteed winning method

Even if you set stop losses and take profits, the logic that can win should be the logic you hold

Any logic will eventually encounter that pattern, so it just feels like “you can win”

Averaging down feels like it saves regardless of logic, which makes it easy to err

Averaging down drags a logic, so it’s inefficient regardless of skill

No matter how skilled you are, you cannot avoid big losses

If you avoid big losses, you don’t earn more than a single shot, and the logic won’t yield much profit

Doing losses on both sides offers the benefit of trading Dow Theory as implied

Averaging down only works in a range; there’s meaning to averaging down because it’s range-bound

Range or trend cannot be distinguished; once a trend appears, averaging down disappears

In the end, focus only on the trend

One-shot trading is the best

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