Building a position (pyramid)

Discussion in 'Strategy Development' started by trevorduddle, Nov 29, 2002.

  1. Hi all,

    New to the site; wonder whether anyone had any ideas about this.

    Are there any methods anyone is aware of (or use) that allow you to increase a position size as it proves itself.

    If I am prepared to risk "R" say to a position then if I place it all at the outset and the trade goes against me I am out "R".

    Is there a sensible way that I could build a position such that I do not risk "R" at the outset but later have "R" working for me when the position is working.

    Clearly this means that as not all of "R" is at risk at the outset, the final return will not be as high but I am hoping that by using a better method the average of winner/loser is higher.

    If I could improve this winner/loser ratio then I could increase the stakes to compensate for the fact that all of "R" is not "on" at the outset.

    Or am I trying to juggle jelly? :)