Pyramiding into a trend

Discussion in 'Strategy Building' started by ElectricSavant, Dec 14, 2004.

  1. ... and probably exits, timeframe, etc. :confused:
     
    #31     Dec 14, 2004
  2. Maverick1

    Maverick1

    entry system is actually a misnomer, you are correct

    what I meant was the trading method

    All that matters tremendously, that is the entry point, exit, timeframe, time in trade etc etc
     
    #32     Dec 14, 2004
  3. For trading with very short timeframes, which probably you do as mentioned by your previous handle/ posts, the above research results would be, I think, a very solid and sound conclusion. :confused:
     
    #33     Dec 14, 2004
  4. forex_king

    forex_king Global Futures Exchange <br>& Trading Company

    Pyramiding is as old as the sphinx, since the days of the pharoahs no one has pyramided successfully.....:)

    Just kidding.....

    To see if pyramiding is a esstential part of your trading backtesting would be a good way to find out....Pyramiding excessively can occur bigger drawdowns, but once a trend is going your way hugh profits can be produced but finding a trend and riding it out is a different story...because any drawdown bigger than 40% can make a person stop pyramiding....find out what is your tolerance level for drawdowns because only you can answer that question.....
     
    #34     Dec 14, 2004
  5. Maverick1

    Maverick1

    The comment above might not hold across all styles, even when short term trading

    Listen, you gotta ask yourself the following question:

    To succeed at this given my trading personality, is it more important to my proper execution that I:

    1) Be more right than wrong?

    or

    2) Be right more than wrong?
     
    #35     Dec 14, 2004
  6. MAESTRO

    MAESTRO

    You are very observant. Yes, we did conclude it from the short term trading stand point of view.
     
    #36     Dec 14, 2004
  7. Quite right, it's a very important factor to consider, for how much heat we can bear psychologically when encountering adverse movements. :confused:
     
    #37     Dec 14, 2004
  8. Without good timing/ sizing for entries/ exits, pyramiding would be (probably very) risky.

    With (truly) good entries/ exits, why would we need pyramiding?
    :confused:
     
    #38     Dec 14, 2004
  9. MAESTRO

    MAESTRO

    Exactly! That is why all of our traders are advised to "rethink" the entries rather than simply add to them. This way you would have a better capital usage and very tolerable drawdowns.
     
    #39     Dec 14, 2004
  10. Maverick1

    Maverick1

    You summarize the conundrum indeed my friend...
    Think hard about it. It's almost a mathematical riddle. And don't fall into the trap of believing that since others have tried and not found any satisfactory answers, you won't either.
     
    #40     Dec 14, 2004