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Pyramiding Strategies: Scaling into Trades to boost returns


by Tim Straiton

 

Pyramiding is a trend-following, risk-managed strategy where traders add to existing winning positions as the price moves in their favor, rather than placing a full bet at once. It increases profitability by compounding gains during strong trends while minimizing risk if the initial trade fails.

Key Components of Pyramiding Techniques

  • Only trade stocks which display strong trending characteristics.  We use the MACD-V trend filter exploration to search for strong trending stocks.
  • Use pin bars for entry signals only in the direction of the trend. We use the 29 period exponential moving average to define trend direction.

  • .Protect open positions with trailing stops.

     

The Metastock code for these indicators can be found in the MetastockSwiss Code Source database which can be accessed here at an annual subscription cost of US$39.00 Visit Site