Pyramid techniques

[meanreversion]

I've been experimenting with various styles of pyramiding in a trend system.. for example, buy the second unit 1 ATR above the first, and then either a) make the stop equal to the first trade entry level or b) make the stop equal to the average of the two independent stops. (similar approach with third unit)

With b), more money is at risk but I find it gives a smoother equity curve over time, and reduces profit to drawdown ratio.

Anyone else have any pyramid methods?

 

[shadowninja]

I look for similar set ups in the same direction. I don't just add more at given levels. You could be unwittingly buying at the high of the day.

 

[elitejets]

My only problem with additions has been that having a position in the first place means I have a bias which can skew my judgement.
I tend to have a lower win rate with additions than primary trades and I think it is because I am less objective once I am in.

 

[amnonco]

I've been experimenting with various styles of pyramiding in a trend system.. for example, buy the second unit 1 ATR above the first, and then either a) make the stop equal to the first trade entry level or b) make the stop equal to the average of the two independent stops. (similar approach with third unit)

With b), more money is at risk but I find it gives a smoother equity curve over time, and reduces profit to drawdown ratio.

Anyone else have any pyramid methods?

first of all, the answer to your Q depends on where you rplaced the stop in the first place...
personally, I would never risk more than the precentage of equity I decided to. but there are traders who increase risk as the trend goes their way.

another method of pyramiding (which is a bit counter-intuitive) is to add less each time.
calculate the total amount of risk and start with the largest amount then slowly decrease amount of addition. (confusing...I know)

good luck