Pyramid Trading: Greater Profits with Less Risk

I will definitely implement it into my trading. In a pyramid trading system we want to set the orders to execute one by one as the trend moves higher. Mandar September 28, at 7: Since we will use the volume weighted moving average to determine when to exit our trades, the role of the stop loss order is not essential. 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.

Today, we are going to discuss the pyramid trading strategy and how you can turn small trades into big winners, it's called pyramiding. You've probably heard of pyramiding before, generally it tends to have a negative connotation to it, but that's just because most traders don't understand how to pyramid properly.

How to Pyramid into a position properly

One day I hope I will become a better trader and then the lesson today will contribute to that. This was really cool Nail. Before My understanding was to take more trades to earn more. How can I earn more by taking less trades? You have a way of putting complex concept into bite sizes for people to understand.

I am a recent member and really love your articles and your training video. Dear Nail, Thanks for the very objective lesson. Actually the more I read and dip down into your trading lessons , the more I realize how it is important to back up your self with such useful ,great and highly skilled educational materials. Happy new year to you and to all our member community and hopefully will be great for all of us. This article is very helpful. It gave me a clear understanding on how to scale in positions without increasing your risk.

Thanks Nial for teaching such a good technique……i am newbie trader and love to learn……. This article was extremely helpful. Now, with your easy to follow Pyramiding article, I can say that I understand the environment on which to scale in a position and no real reason to ever scale out of a position. Excellent…Many Thanks to you Nial. I plan to do a fourth when i get a daily pinbar break above the This is the first article I find on the matter which makes crystal clear explanation.

I prefer take the smallest profit and get out of the trade. Really love this article, easy to understand and you always seem to emphasise the common sense approach. Nice Nial, but I will live this to the pros and continue keeping it simple as one of your article says.

The explanation is simple to follow and understand. I will practice scaling in and let you know how I progress. Hi Niel, thanks for this article. I had success with this approach a couple of weeks back, but last week i made a loss with it. Now i realise its because i didnt maintain well thought out and proper stops.

Your guidelines are a big help. Agree totally on the adding on to positions that show strong trends and break key levels.

I have been using this more and more on forex with the day and H4 charts. Too many bozos are preaching scaling out which for me is a disaster zone. Good content as usual for inexperienced traders. One thing I could never understand is why would you scale out of a winning trade.

It is absolute value for money. Great lesson once again. Thank you for your insights and willingness to share your knowledge with others. Fantastic article, I found it to be very helpful.. Very simple and easy to understand. What are your thoughts on this, i would be interested. As you have now become a good figure to follow in my trading career I was stuck for 2 yrs but then i came across price action.

Enjoyed it very much, and very timely…. I will take your advice to heart. I recently joined your site and have found that your articles and lessons have switched on the light and shown me the power of price action.

Pyramiding your trades is another great concept for me to learn. Many thanks for providing a great place for newbies like myself to develope into experienced traders. Protecting profits is key and its such a good feeling when you are well up in a trade and you cant loose, with the trade still running in your favour.

This is the beauty of trading. Money management can be exciting! Hi Nial,thx for another excellent educative article like many before. I like your teaching style. Hi Nial, I Bought your course last week but Since I started Following your website, Am feeling totally changed my account with winning trades, and this great lesson can increase more, Thanks for your Efforts.

Nial Fuller, you are a genius and truly a wonderful instructor. Very lucid and clear article. You make it simple and easy to understand.

I have been a member for 2 years now and recommend you strongly to all the sensible traders i know. By the way when is your seminar coming up please.

I wish to echo a previous request to put this on video for us we are extremely lucky to have such a Mentor!!! Yeah, this was helpful for me, Thanks Nial. Gives me confidence to NOT having to scale out of a trade for fear of loosing what I have gain. Now I know how to add on more trades and watch my risk managment. This is the article just what I want. Besides,your personal suggestion is very practical because Keeping trades simple is the best policy.

This is great and well educating as it has always been. You changed my trading styles and I now believe forex trading is real. Since I started reading your trading lessons, I have not blown up my account unlike in the past. I enjoyed the article. The information on scaling out was helpful to me. I will never ever scale out in my trading life.

I thought by scaling out I was reducing my risk but now I have realized I was minimizing my profits. This scaling out lesson will save me on future profits.

Thank you very much! With this in mind now I believe the butterflies in my stomach wont haunt me in any way. I normally minimize my profits with early exits only to see it hit moments later.

Your analysis is mostly perfect. Thank you so much guru. Hey mate another great article. I tried a trailing stop on my last trade and totally messed it up or it would have been 1: Maybe this could be your next article on the Metatrader? Nial, I just recently bought your course and everything is starting to make sense to me. Price action is key. This was a very good article on pyramiding profits. Thank you for all the information you provide. How to scale in has always perplexed me.

Your illustration has cleared some of my doubts. Also your thoughts on NOT scaling out has set me thinking. Because I normally take out half position when price has moved eqyuivalent to R1 in favour.

Your comments have now set me to rethink about it. Thank you again for your thoughts and candid explanations. Have a good weekend. If possible could you produce a video. Given a more vidual explaination to todays lesson? I believe many would benefit from it. Amazing insight again to successful trading methology. You have been my saviour.

Thank you for inspiring me. Now I understand what pyramiding in to a trade means and how to do it! You make things so easy to understand. Thank you for an excellent lesson on a subject that has puzzled me for ages. Truly a great method to maximize profit. I will definitely implement it into my trading. Hi Nial, Thank you so much for this expository insight in to the inner-working of fx trade management. Hi Nial — this is very clever.

I gained pips and then opted out cos it got a bit scary only started with Forex in February this year. Does it have tips and exercises for people with psychological baggages? Your email address will not be published. Any Advice or information on this website is General Advice Only - It does not take into account your personal circumstances, please do not trade or invest based solely on this information.

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Please remember that the past performance of any trading system or methodology is not necessarily indicative of future results. I am going to teach you guys how to safely pyramid into your trades today, but before we get started I need to stress one thing: If this all seems a little confusing right now I promise the diagrams below will clarify… Example scenario: Here is a diagram of what your trade looks like at the beginning: Final word on adding to winners… Finally, I just want to stress again that you should not try to scale into EVERY trade that goes into profit.

Checkout Nial's Professional Trading Course here. So only with much patience and discipline to wait for those rare set ups , and when they appears and if there is potential for nice R then we just taking the risk to see if those trades will work in our favour or not Reply.

Matthew January 3, at Andre van Biljon December 29, at 7: Great Info Nial, thank you for sharing. Wish you more success! Mike Connors June 18, at 3: A great article on something I struggle to get right. Halldor Jonsson May 22, at Nial Fuller May 24, at Humbled by the comments Halldor, thank you. Julian May 22, at 8: Ann Leng January 30, at 5: Khaled December 27, at 6: Hey,Nial Great article as always Thanks… Reply.

Caroline April 16, at Michael October 29, at Thein Oo July 24, at 2: Helpful to new trader like me. Nial, this is a trading lesson that holds everything together. Farkad December 31, at 5: Victor October 13, at 2: Mimi October 1, at 3: Great topic for a video hint, hint. And the last step for me to master. Like it so much. Gilles August 29, at 6: Loved that lesson really help full to reduce exposure and increase gain Reply.

Rizwan July 4, at 2: Leon May 25, at 2: Thank you so much coach. That is new skill which i would training hard. Josh May 2, at 2: Sherrod March 31, at 1: Fauzi March 21, at 4: Norman February 8, at Hi Nial, Your information always very helpful, sincerely,thanks for that! Kosio December 17, at 3: Aaron September 8, at 8: Pyramiding is about re-investing existing paper profits as you ride your winning trade.

Also use a trailing stop which is a no-brainer. Tofilau August 29, at 8: This is very helpful. Kum August 25, at Thank you for sharing your knowledge with us.

Lee August 6, at No, the pyramids are not a range of mountains between France and Spain. Yes, there are over 80 pyramids in Egypt. There are also triangular, pentagonal and oblique pyramids in math. This blog is about my pyramid. It is a method that I use for both buying into a position as well as exiting an equity position. My trading pyramid is both a method and a discipline.

It involves adding to a position in a systematical manner to take advantage of an equity showing increasing strength while simultaneously limiting risk. I describe it as both a method and a discipline because often when investors finally make the emotional commitment to buy an equity, human nature seems inclined to want to devour the entire position in one big bite.

In the market, as so often is the case, human nature is wrong. If the market trends higher, you show a profit and the market has reinforced your good judgment. In a sense, you must retrain yourself.

This is not like shopping at Nordstrom. Pyramid trading is the absolute opposite. As your equity continues to trend up, you exercise a parallel discipline of moving your stop up to follow the positive trend and protect your profits.

One misconception about pyramid trading is that you can pyramid down as well — this is incorrect and potentially suicidal. The power of pyramid trading is that it forbids you from adding a second position unless you already show a profit on the first position.

This simple caveat should be chiseled in stone. In the excitement and ensuring madness of a market media blitz — when the hype says one thing but the charts say another — this rule has saved me time and time again.

In a nutshell, you continue to add to your profitable positions and take advantage of the equities up trend as well as controlling your risk by diligently raising your stop following behind your positive trending equity. Pyramid trading is a method that has been validated by numerous academic studies.

Because it takes advantage of bullish trends by increasing position size with each upward wave, it instills the added benefit of disciplined stop adjustments that will make the average trader better and the good trader exceptional.

Pyramiding: Playing with the market’s money

Pyramid trading fits perfectly into this mentality because it compounds your winning trades into two or three times the initial profit potential while reducing your overall exposure. Therein lies the best part about pyramid trading – if done properly, you aren’t exposing yourself to any additional risk. Order Handling with a Pyramid Strategy. Pyramid trading has much in common with grid trading. Both systems use split orders and usually make use of pending stop and limit orders. To profit from a growing bullish trend or a potential bullish breakout a pyramid trader will deploy buy stop orders. Pyramid Trading Scenarios. Let’s look at a quick pyramid trading example to illustrate my point. Let’s assume trader #1 adds one order each 20 tick move against their original position while Trader #2 adds one order for every .