Hiya all
made a decision to start a journal here. Since spending far too long in here.
makes it convenient for me to keep tabs on ze trades.
Okay to make a long story short.
This entry diary is going to be dependent on an experiment about the effects of pyramiding and how to limit the risk connected with it while maximising profits.
If risk management is possible, the profits should be limitless.
nb. This can be an experiment, please use a demo, miro lots etc going actually live.
Couple have succeed, and those wildly successful ordinarily do not return to tell you about it
pyramiding ( Intra-day) only operates on pairs with high Typical Trading Range. This method is not suited on ranging markets, I will choose the pound yen since it's the maximum ATR. And is suited to Daily Intraday testing. Make waiting usually take 2-3 hours every day.
There are lots of types of pyramiding and I would love to employ them and confirm the effects in my trading in real time and also to test if a EA works. I will use a pyramid based on the methods of what I thought a trader called Jesse Livermore used.
I might be incorrect.
This being a extremely aggressive egy to profit maximisation but might also violate your account in double quick time if one doesn't follow strict guidelines on prevent losses etc
discipline is the key. . ( something that I had trouble Implementing myself)
again please do not experiment with an overleveraged account, possibly a demo account is going to be a good beginning, then micro miniature lots etc
ideally together with pyramiding your profits will be compounded. And your losses will... well... not be compounded ( cough)-
in character your losses will be compounded as well.if you are careless.
It's more challenging to recover your losses as soon as your account is halved. leverage is a double edged sword.
The suitable unit size formula is 1 percent of account/ ( ATR* Dollars a pip) - ( mention - turtle trading ) - if you need it you may PM me to get it.
I have borrowed a few concepts from a trader called Jacko.It is a remarkable tool he coined the anti-hedge. For your essense of his thought and good investing, please refer to the first 2 pages of the thread.
I will use the anti-hedge and TSL for each position, this ensures stops are honored,and profits allowed to run.
There will be 3 unit sizes / positions added daily for one major trend.
Unit ratios are going to be in ratio of : 1, 2, 3 respectively
as long as there is continuation from the major trend.We will last till a 100 pip move or TP is hit.if that the 100 pip move is never finished. We will not take profit ( and will take a loss)
your reduction should be 60pips in span or 1 unit size *60= 60pips respectively.
- that can be inline with a good turtle guideline to let your profits run and make profit ( a practice of patience) only when your target hits.you may add more units after the 100 pip move if you want, or simply lock in profits and let it run its course with the TSLs.
Stops should be manually transferred to breakeven on the subsequent addtion of the 2nd and 3rd positions and when stopped out on retracement should be re-entered on exactly the same spot. This is preformed by my EA. I haven't manually attempted it will see if it is humanly possible. I believe it will be somewhat awkward but invisibly.
This method is counter plausible to the common wisdom of constantly taking a profit.
Inline with jesse's method of not taking profits til there is a very clear trend reversal or until you are stopped out will make this experiment a puritant one.
A trend reversal is just one I see in my 15min TF systems signal.
Summary:
Trades will be day ( unless it is a holiday, lack of volume, markets will range, you will find ranging months which you do not need to employ this method as well). TP will be completing a brief 100 pips proceed or 3 positions added at different points to get a total of of 400pips at a 100 pip move.
has a ATR of 250 pips and over on a average day. Biggest moves mainly occur in London.
Trades will be recorded reside with this thread, and Asia will be mainly used for scalping since it largely ranges.
Mishaps will happen from time to time when there is sudden unexpected news (spikes) leading to change of fashion, and prevent losses are not implemented in time.
I egorize these as freak injuries.
A good broker may minimise this but your account should be prepared for such drawdowns.
For the 3 types of pyramids, you may refer to excerpts of an article by Robert W Colby
an illuion under
We wil be taking a position at on the . We'll use the J pyramid.
I will be trading 6 Standard lots per trade
position one will be taken at ( 1 criteria ) - that tests the trend, if you are wrong or temporarily so, allow it stop out, no point adding.
Place two will be taken at ( 2 Standards)- fashion confirmed
Position three will be taken at ( 3 Standards)- ches the previous 5-7/8 th of this move.
At a 100 pip move, this will give me,
1*100 2*75 50*3= 100 150 150= 400 pips
my baldness is going to probably be 1*60=60pips
thus I will be allowed 20/3 or 6.67 losses to 1 win in order to breakeven
risk reward 6:67:1
our win:loss ratio is anticipated to be 3:1with a good system trigger
enuf stated will experimentation the first trade on the on Monday
Pyramiding for the uninitiated: A Risky Strategy
Pyramiding is adding to positions as price moves in the desired trend direction. Pyramiding is a highly aggressive trading egy suitable only for full-time professional traders who know how to control risks and possess the discipline to perform a tested egy consistently. Pyramiding should be implemented only based on a predetermined and tested method that includes a successful prevent loss.
Though pyramiding raises profits when the trend continues as hoped, pyramiding also increases losses when the trend reverses, so risk control is key. Reward/risk tradeoffs quickly turn against the pyramid trader when the price trend cries. Because adding to positions changes the entire price of the entire position on a per-unit premise toward the previous price, a fast reversal to the initial entry price can create a significant reduction. And if the price changes direction quickly and invisibly, like on a gap or fast market, it can be impossible or hard to limit risk according to plan.
The sign to add to positions might be triggered in predetermined price points which support the trend direction. Such price points may be dependent upon volatility bands, moving averages, a variety of trendlines, logical chart factors, penetration of resistance levels, etc.
The standard pyramid, which can be referred to as the scaled-down pyramid or upright pyramid, starts with a large initial position and can be followed by predetermined additions that fall systematically in size as price moves at the indied trend direction. By way of instance, if the initial entry was for 100 shares, then as price moves into the next predetermined amount add 50 more shares, then 25 more in the next level, then 13 more, for a total of 188 shares.
The inverted pyramid, that can be called the equal quantities pyramid, adds to a first position in equivalent share-size increments. By way of instance, if the original entry was for 100 shares, then as price moves into the next predetermined amount add 100 more, then when the price continues 100 more, then 100 more, for a total of 400. Here, however, the average price per share is a lot higher, such that a smaller price reversal removes all profit. The inverted pyramid offers greater potential reward in the price of much greater risk, when compared with standard, scaled-down pyramid.
The representing pyramid systematically adds to a position up to a predetermined price level, then it reduces the position systematically as the trend continues, hence the representing pyramid is not a pure fashion following method. If the price does have a major movement from the indied trend direction, the representing pyramid would lead to less profit than both the conventional and inverted pyramids.
The maximum-leverage pyramid keeps on adding maximum size up to the limits of accumulated profits and margin requirements. This is the most aggressive egy possible, and it features the maximum potential reward, the maximum potential risk, and also the worst reward/risk ratios. This pyramid has to be combined with tight departure rules, or it is a formula for near-certain ruin.
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