Effectiveness and Risks of Pyramidding

NexusFi · 2011-10-12T00:51:47-04:00

Many people view pyramiding (increasing size as you raise unrealized profits) as a way to greatly increase performance. However, this adds significant risk to an already successful trade. I would like to hear some opinions and quantifiable methods of pyramiding. Intraday: Generally to pull this off intraday you need to be highly leveraged. Frankly for most traders this is asking for a blowup. Daily: It is easy to pyramid on larger trending markets. Look for confirmation on higher time frames and add to your …

Discussion in Psychology and Money Management

Updated October 12, 2011

Effectiveness and Risks of Pyramidding

October 12th, 2011, 12:51 AM

#11 (permalink)

jonc

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telco

@ jonc

No offense, but unless you are doing decent size that is probably a losing approach, ESPECIALLY if you are scalping.

If other people think what I'm saying is incorrect please correct me.

No offense taken, I didn't quite explain myself in specific so it does sound like an averaging on losers approach.

Basically I tries to identify possible turning point in price, the problem here is I would not be able to pin point the exact top or bottom but I could have a high chance to be right guessing the high probability range which the turning might occur - key support/resistance. Prices will generally oscillate once they get there - great for scalping.

So once the price goes into the region, I start getting in. I could have as much as 50-60 entries. I would take profit fast on many of these entries.