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Kent:
My suggestion is the following:
- Treat each entry as a SEPARATE trade, with it's own risk/reward etcetera.
If you think in terms of trading systems, think of "additional entries"
as OTHER SYSTEMS that you are running concurrently to the system that
entered initially.
- Separate position sizing from the system. Evaluate each system
(each of which makes discrete entries and exits, and never "adds to"
positions") independently, and decide on position sizing for each
system, based on overall factors (total equity, how much you wish
to allocate to each system, etcetera).
My logic for these recommendations is simple: an "additional" entry isn't
any less risky because we are already in. It is good or not so good on
it's own merits and faults. The hurdle for deciding to add to a position
should be identical to the hurdle for taking a position in the first place.
Position sizing is separate because it's a matter of how much bankroll
you have, max loss reasonably possible, how much percentage of equity
you are comfortable losing in any one trade, overall win/lose stats,
etcetera. To me, "system" = when to enter and exit, single contracts.
Then, System results + available money + personal values => position sizing.
My $0.02 (double or nothing?)
-Kevin
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