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    Thread: How to properly scale in or apply pyramiding on a trade ?

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      Default How to properly scale in or apply pyramiding on a trade ?

      This is what I am still lacking, how I can manage to scale in or use pyramiding to maximize my profit if my trade goes on my favor and really the set up is on trending, for those of you guys who are very much familiar with this, mind if you could share it also ?
      Last edited by Aviz; 08-07-2018 at 10:43 AM.
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      the idea of scaling in or pyramiding comes in an attempt to take advantage of an instrument that is performing well. this allows for more profits to be made as the position grows. in other words, pyramiding is used only on winning positions to take full advantage of a high-performing asset and hence increase profits. in effect, pyramiding is not used on losing positions.
      to properly benefit from pyramiding, a forex trader has to take the following steps:
      1. identify the trend: pyramiding works because a trader is only adding to winning positions. this continues as new highs are created in a bullish market(new lows in a bearish market).
      2. prevent increased risk by regularly moving stops to the recent support levels in case of long positions or recent resistance in case of short positions.
      3. do not pyramid on markets which are prone to large gaps in price.
      4. let your new position be far from the last position to ensure you still earn profits even if the market turns.
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      pyramiding is not and easy task, we all know that the market condition always goes up and down and this condition often makes some trader thinks they can use this opportunity to gain a greater result from their trade. if we have a strong trend i believe that pyramiding can be a great way in making our profits greater. but if the market goes to a reversal, then pyramiding is a bad way to losing our profits we gained and worst it can also create a greater loss.i think that no trader can be 100% sure whether the market is in a full strong trend or even in a reversal. but the safest way in doing pyramiding is by opening our next trade only if the pull back already shows a reversal candle so we need to open our position at the moment when the market shows that the trend still in a rally and not entering the market when the price haven't shows the trend continuation.


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      Different trader try to scale in different method because everyone is unique and not all trader follow same strategy and plan. I am kind of a long term trader and I try to stick my trade for a long time and that's why my method of scaling is a hectic one. But still this method has given me a lot's of confidence because it's convenient for me and it's also effective for the long term trader like swing position and trend trader.

      As I like to hold my trade if it goes in my direction I have setup few rules for my scale in and those are below.
      • I open second trade which is my first scale in only if I reach three times my risk which is 1:3 RR Ratio.
      • I don't scale in randomly rather I wait for my setup to emerge and only If it meets my criteria I enter the market.
      • I put stop loss for my scale in and event though it's an adding possition but still it's an independent trade.
      • I risk less money than my first trade and I follow this rule even in my consecutive scale ins.
      • This things helps me to manage my risk and even if the market rebounds still I become in the safe side.
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      - To properly apply Pyramiding In trading you have to :

      1- Use this strategy only when you have strong up trend or strong down trend because it can't success while the weak trends .
      2- Make plan for your trade by pyramiding strategy by defining the support and resistance lines level that you will enter from its or the number of pips that you will open new trade every moving equal it as opening trades after every 50 pips .
      3- Make proper risk to reward ratio as 1:2 and this means that if you will start trading with 50 pips profits and 25 pips stop loss when the market up for 50 pips you have to open the second trade with the same lot and the same Risk to reward ratio so if the second trade made profits 50 pips you can open the third trade with the same risk to reward ratio because if the third trade hit its stop loss 25 pips this will means that your net profits is 50 + 50 - 25 pips = 75 pips so the trading with the same lot and the same Risk to reward ratio always give us good results .
      4- Discipline with your plan without any greed or changing in the trade lots because the control on the emotions is very important while the trading with this strategy but the greed may make you open big lots after the first lot and when the market move on the opposite way this may lead you to a very big loss so always control on your greed while the trading .

      To understand the above information and the trading with pyramiding strategy you can take a look on the following photo :



      From the above photo we can know well how to trade with the pyramiding strategy properly .


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      To make a pyramiding strategy first we have to understand the basic of this strategy .Here we have to put the same lotsize and the same number of pips for the stoploss and also the target of the pips will be same ,lotsizes are opened at the same distance .Here actually we are increasing the chances of the winning positions when our first trade order comes to a comfortable situation ,we can extend that profit run .

      This pyramiding strategy is not actually averaging down but here we are adding the positions to increase the chances of the profit pips,its a safer one because we are trading with the profit risk we are making earler so our main equity will not be hampered and we can easily make some good extra pips from the same strategy and plan.


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