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.
• 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 )
• Many times when the market is in sideways mode, Entering a trade with full risk might not be the best idea.
• So, you test the waters with a small position first, it could be ⅓ or ¼ of your total risk.
• So if the Breakout fails or whipsaws come, then you will only lose a small part of your overall risk.
• 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 don’t put all your eggs in one basket, but don’t put them in too many either.
• See, Everyone can see charts and find breakouts, pullbacks etc.
