Pyramiding 2.0
A thread-
What is pyramiding?
It is simply adding to your winners.
Why use pyramiding?
1. It makes your winners bigger than your losers.
โข Because you are adding positions when your trades are going your way, you are increasing your gains but your losers will be small comparatively.
2. You lose less during Draw-down time ( it saves you from losing big during whipsaws )
โข Many times when the market is in sideways mode, Entering a trade with full risk might not be the best idea.
โข So, you test the waters with a small position first, it could be โ
or ยผ of your total risk.
โข So if the Breakout fails or whipsaws come, then you will only lose a small part of your overall risk.
โข Then when position starts to go in your favor you can add to it.
3. It helps you to concentrate on a few trades,
They say that donโt put all your eggs in one basket, but donโt put them in too many either.
โข See, Everyone can see charts and find breakouts, pullbacks etc.