Pyramiding 101
1/ What is 𝗽𝘆𝗿𝗮𝗺𝗶𝗱𝗶𝗻𝗴?
Pyramiding is adding to positions as the price moves in your favor.
"The best stock to buy is the one you already own."
-Peter Lynch
2/ There are many ways to enter and exit a stock, some of them are :
🔹All in - Scale out (what I do)
🔹All in - All out
🔹Scale in - Scale out
🔹Scale in - All out
3/ In my opinion swing traders should go with the 'All in - Scale out' approach and positional traders should go with the 'Scale in - Scale out' approach.
4/ Why pyramiding?
🔹Pyramiding will keep your average loss low compared to your average gain.
🔹When the market is hostile and hitting your SLs left and right, pyramiding will keep your drawdown low.