Adding to a winner based on the fact that it has a trending tendency is favoring a bigger position when you are on the right side.
I prefer to do the opposite. I load up full position on entry, and then scale out. Why? Because by definition you are getting ever crappier prices if you scale in as the move goes your way. If in a good trend, then this works fine, but I find good trends tend to be the exception, not the rule. I do get really picky about my entries however, and set tight stops as well. The cost for doing this is I completely miss lots of moves. I do not let this bother me however. The markets are not going anywhere.
I think you're addressing the problem in the wrong way. If you just add to your position with every increase of x points, you increase your potential for a drawdown if the market moves against you. What I do is start my position with half my contracts. i then wait for a thrust move to confirm my trade decision. if i get a higher high, i know I'm right on the money. I then wait for the counter swing, which usually pulls back to slightly above my initial entry position. Now I'm ready to add to the position at a good entry price. I look for a few candlesticks showing some tail action - a hammer for instance. Then I add to the position on the way up. This is more of a touchy feely approach that a mechanical approach, but it allows me to tailor my exposure with my confidence level. Runningbear
My suggestion is not to add positions as your trade goes in favor or against you. However, as your PL increases over time, consider increasing number of shares/contracts progressively and slowly in relation to past wins. Susana
it all depends on what you trade. if you trade the trend and enter on pullbacks, you can't really add to positions especially if you daytrade and go for a retest of the previous swing high/low. however if you trade reversals, adding to winners is essential in building up larger positions.
i can honestly say that the biggest increases in equity I've recorded have all been through adding to a position that has gone into profit. Usually if I don't do this, I end up under-committed on big moves. And if you just add to a position at support or resistance, it's too easy to be over-committed if it goes against you. Runningbear
Only add to a profitable position if you get another valid trade signal in the same direction. Simply, do not add solely based upon the winning position reaching a particular price level. Manage each contract as it they were an independent trade. Mark