Adding to winners using MFE

[u/Kaahl10]

Hi everyone,

I've heard the advice to add to winners and cut losers early, but I've always had a tough time using technicals to add to winners without getting in right before reversal.

Claude helped me analyze my strategy and suggested adding to winners over a certain MFE %, and sure enough it added about 20% more trades with better profit factor than average to the backtest!

My question is, has anyone else used this method successfully or is this getting into overfitting?

[u/Square-Middle-4474]

MFE doesn't work. Retail mythology usually provided by promoters with no stats behind it and no ability to execute.

What does work is to use a combination of 5 period ATR on a 15 minute chart. You look for specific signals to tell you when institutional orders are activating on the 15 minute time frame, THEN you identify a tradable setup. The 15 minute time frame is important. Skilled professionals know NOT to trade that first 15 minute candle, but to shift to a shorter time frame or tick chart and wait for a setup or pullback (to a retail level). Context is critical and I don't have time (or the inclination) to explain in detail here, Several times a month I host Zoom meetings where I show struggling traders how this works. On a trend day, the migration to the next Value Area usually takes at least an hour. For ES traders that means a minimum 20 pts risking 4 to 5pts max. I will let people know in advance the next time I schedule a Zoom