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Originally Posted by kenazen
A quick question on "pyramiding".
I have read that many "bold" traders pyramid their trades. I'm not sure exactly what they mean, but I may do something similar with stocks.
If I have a winning position, I sell my losers and pile on to my stocks that are doing well. I don't mind buying at "highs" because I am already in with a profit. After several weeks of this "quality consolidation", I may end up with all my money on just 2-3 stocks from an initial 10-15. As these stocks make their run up, I tighten my stops, and usually get out when they peak. Then I repeat that cycle.
If I put 2% on an initial currency trade, and it is profitable, is there anything wrong with adding to that position if it becomes profitable? Looking at the 3/4 hour charts, there are some major trends that occasionaly develop, it would be sad to only have 2% on them.
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Adding to positions is fine, just as long as they're
winning positions
Many traders add to positions on retracements in a trend, and I guess there are some other more complex strategies out there for maximising profit.
Mick