Itsallaboutss

Performance

  • -3.6 %
    since 2019-04-30
  • +3.6 %
    1 Year
  • -2.4 %
    Ø-Performance per year
All fees have already been deducted

Risk

  • -23.6 %
    Maximum loss (to date)
  • -
    Risk factor
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Trading Idea

Securities, options, futures, Pyramiding involves adding to profitable positions to take advantage of an instrument that is performing well. It allows for large profits to be made as the position grows. Best of all, it does not have to increase risk if performed properly. In this article, we will look at pyramiding trades in long positions, but the same concepts can be applied to short selling as well.
Misconceptions About Pyramiding
Pyramiding is not "averaging down", which refers to a strategy where a losing position is added to at a price that is lower than the price originally paid, effectively lowering the average entry price of the position. Pyramiding is adding to a position to take full advantage of high-performing assets and thus maximizing returns. Averaging down is a much more dangerous strategy as the asset has already shown weakness, rather than strength. (For further reading, see Averaging Down: Good Idea or Big Mistake?)


Pyramiding is also not that risky - at least not if executed properly. While higher prices will be paid (in the case of a long position) when an asset is showing strength, which will erode profits on original positions if the asset reverses, the amount of profit will be larger relative to only taking one position.
Why It Works
Pyramiding works because a trader will only ever add to positions that are turning a profit and showing signals of continued strength. These signals could be continued as the stock breaks to new highs, or the price fails to retreat to previous lows. Basically, we are taking advantage of trends by adding to our position size with each wave of that trend. show more

Master data

Symbol
WFWF0606SS
Date created
2019-04-30
Index level
High watermark
101.0

Rules

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Investment Universe

Trader

Registered since 2019-04-30

Decision making

  • Technical analysis
  • Fundamental analysis
  • Other analysis