You are no doubt aware that adding to winning positions in a strategic way has the potential to boost your trading results on any one trade.
In trading, we call this pyramiding.
Pyramiding is the act of adding to a position that has moved in your favour.
Some of the most successful traders to pyramid into winning positions include:
· Jesse Livermore
· Larry Williams (who made the a record 11,000% in a Futures trading competition)
· Nicolas Darvas (who made $2 million in 1957 trading stocks)
· Zhen Wang in State 2 of the 2020 Trading Cup
Click play on the video below to learn more about pyramiding, plus the pros and cos of this strategy.
· What is pyramiding in trading?
· Why pyramiding has been so effective in stage 2
· What are R multiples?
· How to look at winning trades in terms of R multiples
· How the Turtle Traders used it with incredible results
· A strategy on how to use pyramiding
· Which strategies are best suited to pyramiding
· What strategies should not use pyramiding
· The best books to read to understand this principle in more details
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Ashley Jessen is the author of CFDs Made Simple and Chief Operating Officer at ACY Securities. He has been in the financial services industry since the year 2000 and worked for some of the leading companies in the CFD, Forex and Online Trading space.