Pyramiding - futures trading

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To add more contracts/shares/assets/financial instruments to a winning trade ie as price moves in your favour from the original entry price (in other words it is currently a winning trade) you add further exposure thinking that price will continue to move in your favour and consequently the trader will make more profit than would have been made with just the original entry exposure.

Note this is different to Scaling In where further exposure is added as price moves adversely to your original entry price.

Pyramiding results in your average entry price getting closer to the current price, meaning if price turned against you suddenly and violently the trade could quickly be in a losing position.

Experienced traders may Pyramid a trade then take the added exposure off after a favourable price move and then pyramid again, continuing to do this several times during one trade as price continues the broad trend. Traders do this as they build their position up to All In, and then release some of the exposure and then Reload again etc etc.

Pyramiding is also know as Averaging Up, Pressing the Trade, Loading Up, Reloaded, Reloading, Reload, Adding to a Winner, Adds, Add, Adding and Added.

See also:
Created by  steve2222 , March 5th, 2016 at 08:15 AM
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There is a substantial risk of loss in trading commodity futures, stocks, options and foreign exchange products. Past performance is not indicative of future results.

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