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Pyramiding

Close to use Darvas's boxes trategyTechnically: H4 big desc. candle, closed below the support line. No correction above 5% H1 shows us accumulation in a narrow range Bearish pattern There are empty zone below. Green dash line is an next support. Nicholas Darvas wrote his book after he understood that when the price follows the trend there should be possibillities to increae your position at local stops. It like a train, going fwd, and at the stations you can join the trip. Next station we expect at the 838 (supp.from the Hune 15, confirmed Jun, 30) We have to be very careful about increasing our sells and should see the confirmations from the chart. like low corrections, small bars approaching the level, close retests of the level. In this case it will be allowed to double your position with correction of SL.
Short
by rakhascapital
1
Bearish moodDaily: Down trend, target price ~5.80 (5.90). The pair is in the channel after descending, no bullish signs from higher TF. H4: After fast descending from the 9.00 the price stopped at local support (~7.9). Usually after fast movement the price need some time for the rest, new traders will come in. Everyone see the levels, everyone is putting their stops and market orders in one place. Therefore it is quite usual, when the price will breakthrough res|sup with further backward moving... As of today, we have to wait short signals (bearish patterns) of the cahrt to go deeper. Meanwhile we may start* to sell close to ~8.0, with SL above and increase our short at 7.73, 7.50 *Do not expect from the market that it will go as you plan, be in focus on real situation here and now. Manage risks and turn-off emotions.
Short
by rakhascapital
How Do You Build A Position With Pyramiding?As a trader, it’s a general rule of thumb that we should always be looking to maximise potential returns (per unit of risk) with each transaction. We should always be looking to squeeze as much out of the market as we can. There are times when this can occur by simply letting the trade run its course. However, sometimes market conditions align perfectly for savvy traders to “press the trade” or Pyramiding into the trade. Don’t press your luck; press the trade instead! Attempting multiple entries in the direction of a trend is one strategy savvy traders use in an attempt to maximise return (otherwise known as Pyramiding). The problem with this tactic is that while it may increase the potential reward, having a larger position in the market also opens you up to more risk. As a trader, you need to find the perfect balance of pressing the trade while not pressing your luck. There are a few ways to achieve this: If the market is moving at a snail’s pace, and not much movement has been made from the initial entry, any additional entry should be minor. If, however, a decent distance has been travelled, a trailing stop will secure more profit, and any additional entry can be larger. In essence, any additional position sizes are partly dependent on the distance between the initial entry position to stop loss. Ensure you have a strong driver that pushes prices along. Simply pressing trades at random is not good risk management. Reduce risk on entry by only adding additional positions when the stop loss on the first position can be trailed. Pick your battles carefully when Pyramiding You may find that as time wears on, you’re left with a large portion (>2% of total equity) in a single trade. The tactic of adding exposure will generally make for a “short” pyramid, which typically won’t grow over 2.5% of overall equity. This Pyramiding tactic ensures you’re exposed to additional upside while minimising downside to a level with which you’re comfortable. Here are a few things to be wary of: Keep an eye out for drivers that influence market psychology: This is when momentum and volatility will be high, allowing you to pyramid into a move more easily. For the technical traders, you may prefer to avoid day-to-day shifts by taking in a broader market view. Diversify: as with any investment, don’t place all your eggs in one basket. Diversification is key to keeping overall risk low. Have strict risk limits in place: With 2.5% in one pyramid, another 2.5% in another – next thing you know, your overall portfolio heat is close to 10%. That’s a high amount of risk to carry around with you. Consider minimising position sizes of certain trades to reduce overall risk. Consistency is key with position sizes: If your initial entry is $100k and your second is $300k, you’re off to a lousy start in building your pyramid. Final Thoughts on Pyramiding Remember always to start small and slowly. There’s no need to rush in. Experiment with pyramiding until you’re comfortable with your approach. Always remember the two key elements to consider: Resist the temptation to take profit early when the opportunity arises. Sometimes it’s best to sit on an existing trade. Be wary of adding to your trade at “worse” levels. Trends will always end at a certain point, so you don’t want to be pyramiding into an extended, ongoing trend. Look for new trends to pyramid in, which will reduce your overall risk.
TVC:GOLDEducation
by BlackBull_Markets
2
Custom pyramid strategyHi all I want to share a new approach I have been trying for the past year with great results. Normally I would try to create a script that would create 100% trades, meaning that each emittet alert would sell 100% or buy 100%. I fell in love with the pyramid strategy because this keeps you in the market as much as possible but I was still missing something. In a standard pyramid strategy you would buy at several levels and then at some stage sell it all. And that works great in most situations but I saw several times that selling all could end up throwing you off the market at an early stage of a bull run. So I created my own custom pyramid strategy where the percentage of both sell and buy orders are based on volume and other indicators. The percentage is calculated to be exponentially rising if orders of the same kind happens concurrently and then if an alert of an opposit order should emit then percentage of that order is calculated from the position in the major trend + the volume at the certain time. This enables me to stay in the market and not miss out on major jumps. Granted that I might not have everything in the market at all time but I am never missing an opportunity. So I guess this is a matter of temper/risk at least. :) I prefer not having risked it all at once. How do you prefer to trade? I have published a script to show the results from my findings (click the image below). This script shows how it works with BTC but it can be fitted to work with most of the major coins. It works best with the major coins because of the volume.
COINBASE:BTCUSD
by JackTz
Capital Management - Pyramiding. Coin for pumping. Matic.Money Management Method - Pyramiding in action online on a pump coin. Matic / btc . Big profits are minimal risk. Smart trading. Stop Loss showed where to place and by what principle they move because all the zombies want to see them. Stop Loss takes place when you are not in control of a position for a long time. But you must clearly understand where you should go when the price goes against you, and no retention of a losing position, in case, "what if the price comes back." Always adhere to your strategy and plan, but at the same time, be flexible and have all the scenarios in advance. Be smarter for other market participants. Matic / btc pyramiding in profit figures now: 1 entry point for $ 1000 + 177% $ 2700 (net $ 1700). 2 entry point for $ 1000 + 135% $ 2350 (net $ 1350). 3 entry point for $ 1000 + 90% $ 1900 (net $ 900). 4 entry point for $ 1000 + 35% $ 1350 (net $ 350). The total profit at the moment from 4 entry points with a minimum risk of $ 4000 becomes $ 8350 (net $ 4300). There is one thing, but the profit is much larger, as the trade was conducted in the accumulation channel with a price step of + 77%. Trading was carried out by 30% of the accumulated position, increasing it with complex%. Trading in the channel will allow you to advance to a specific profit before the channel breakthrough. It will also help minimize its risks in case the uptrend support of the accumulation channel is broken down. As you would already be in profit from trading in the channel in 77% increments, at least cover Stop Loss loss. It is clear that the movement of 77% of the channel will not come out each time, like the entrance and exit when confirming the price reversal from support / resistance. But 30-40% can be obtained, but not always. This also needs to be understood. Also no need to be afraid to buy at prices at a higher price. Sometimes buying at slightly higher prices is much safer than buying at the bottom, which may not be the bottom. The most important thing is the correct entry and exit point. The entry point should be with a potential big profit and minimal risk. What else does trading in the accumulation channel give you? You need to understand what could have been so (it is unlikely, but this should not be ruled out) that the price channel would have broken down and fixed under it. If you were “Waiting” like everyone else, it would mean a losing trade. And a loss in the amount of your Stop Loss according to your strategy. And if you have a big position, but not a lot of liquidity in a coin? As a rule, such coins are so, then there are situations when a breakthrough of support creates a panic-drain in the market, which goes to a large percentage of the price movement. Here, in this case, the extra earned profit up to the input amount helps. Another addition in such coins in most cases is not possible to become short, therefore trading in two directions will not work. This must be understood in advance and taken into account in your trading strategy! It is also important that someone thinks that he would just enter the breakout zone of the downtrend and take the same + 100% without these games and complexity. This is so if you have a small input, let's say $ 500-1,000 is not a problem, but if the amount is larger, this will cause difficulties to enter not noticeably and not provoke a premature price increase. You need to understand that at important pivot points you are not the only ones who want to enter the market, and in some coins the liquidity is low. And an entry instead of a step of + 2-3% can provoke a price increase of 10%. You can just trigger a panic buy. Another option, for example, you bought 50% of the coins for the planned amount. Further you see that a further purchase will provoke an increase in the price by an unacceptable%. You can use your purchase to keep the price from rising and force other market participants to sell you and thereby gain the remaining 50% of the planned position. This works if you know how to work with a glass and a ribbon of sales and purchases, well hiding the actions made in advance. After all, you need to understand that not only hamsters are on the market, and there are traders who not only look at charts, and therefore are more informative in what is actually happening. But all this only works in ordinary situations. At important points in the price reversal, your walls will be eaten up, you will give someone a gift allowing them to buy a large position without slipping the price. Just ask yourself a question, and you wouldn’t do it if someone gave you such a gift? It is easier to work on TOP coins with this management method due to the greater liquidity and greater predictability of the price movement, but the profit there is many times smaller and more time-stretched. Time is money. The liquidity of TOP coins allows you to work in large amounts, and there will always be enough liquidity for a short Stop Loss, which can not be said about pump coins. It is worth mentioning that you can work short on top coins if the price goes against you, therefore there is less risk due to greater plasticity for the trading instrument. But once again I’ll remind you the profit is much less, a long extended time interval and a small selection of trading tools. I showed in more detail about this method of money management on TOP coins using the example of LTC / USD in these trading ideas: EDUCATION Pyramiding How to earn 52000 with a risk of 5% from 10000 1part EDUCATION Pyramiding money management. 2 part. Short LTC/USD The trading idea for this coin for 13 11 2019 is before pumping and leaving the accumulation zone. MATIC at the breakout zone of the downtrend Great growth potent
MEducation
by SpartaBTC
Pyramiding online on a coin for pumping. Matic. Smart trading. Money Management Method - Pyramiding in action online on a pump coin. Matic / btc. Big profits are minimal risk. Stop Loss showed where to place and by what principle they move because all the zombies want to see them. Stop Loss takes place when you are not in control of a position for a long time. But you must clearly understand where you should go when the price goes against you, and no retention of a losing position, in case, "what if the price comes back." Always adhere to your strategy and plan, but at the same time, be flexible and have all the scenarios in advance. Be smarter for other market participants. Matic / btc pyramiding in profit figures now: 1 entry point for $ 1000 + 177% $ 2700 (net $ 1700). 2 entry point for $ 1000 + 135% $ 2350 (net $ 1350). 3 entry point for $ 1000 + 90% $ 1900 (net $ 900). 4 entry point for $ 1000 + 35% $ 1350 (net $ 350). The total profit at the moment from 4 entry points with a minimum risk of $ 4000 becomes $ 8350 (net $ 4300). There is one thing, but the profit is much larger, as the trade was conducted in the accumulation channel with a price step of + 77%. Trading was carried out by 30% of the accumulated position, increasing it with complex%. Trading in the channel will allow you to advance to a specific profit before the channel breakthrough . It will also help minimize its risks in case the uptrend support of the accumulation channel is broken down . As you would already be in profit from trading in the channel in 77% increments, at least cover Stop Loss loss. It is clear that the movement of 77% of the channel will not come out each time, like the entrance and exit when confirming the price reversal from support / resistance. But 30-40% can be obtained, but not always. This also needs to be understood. Also no need to be afraid to buy at prices at a higher price. Sometimes buying at slightly higher prices is much safer than buying at the bottom, which may not be the bottom. The most important thing is the correct entry and exit point. The entry point should be with a potential big profit and minimal risk. What else does trading in the accumulation channel give you? You need to understand what could have been so (it is unlikely, but this should not be ruled out) that the price channel would have broken down and fixed under it. If you were “Waiting” like everyone else, it would mean a losing trade. And a loss in the amount of your Stop Loss according to your strategy. And if you have a big position, but not a lot of liquidity in a coin? As a rule, such coins are so, then there are situations when a breakthrough of support creates a panic-drain in the market, which goes to a large percentage of the price movement. Here, in this case, the extra earned profit up to the input amount helps. Another addition in such coins in most cases is not possible to become short, therefore trading in two directions will not work. This must be understood in advance and taken into account in your trading strategy! It is also important that someone thinks that he would just enter the breakout zone of the downtrend and take the same + 100% without these games and complexity. This is so if you have a small input, let's say $ 500-1,000 is not a problem, but if the amount is larger, this will cause difficulties to enter not noticeably and not provoke a premature price increase. You need to understand that at important pivot points you are not the only ones who want to enter the market, and in some coins the liquidity is low. And an entry instead of a step of + 2-3% can provoke a price increase of 10%. You can just trigger a panic buy. Another option, for example, you bought 50% of the coins for the planned amount. Further you see that a further purchase will provoke an increase in the price by an unacceptable%. You can use your purchase to keep the price from rising and force other market participants to sell you and thereby gain the remaining 50% of the planned position. This works if you know how to work with a glass and a ribbon of sales and purchases, well hiding the actions made in advance. After all, you need to understand that not only hamsters are on the market, and there are traders who not only look at charts, and therefore are more informative in what is actually happening. But all this only works in ordinary situations. At important points in the price reversal, your walls will be eaten up, you will give someone a gift allowing them to buy a large position without slipping the price. Just ask yourself a question, and you wouldn’t do it if someone gave you such a gift? It is easier to work on TOP coins with this management method due to the greater liquidity and greater predictability of the price movement, but the profit there is many times smaller and more time-stretched. Time is money. The liquidity of TOP coins allows you to work in large amounts, and there will always be enough liquidity for a short Stop Loss, which can not be said about pump coins. It is worth mentioning that you can work short on top coins if the price goes against you, therefore there is less risk due to greater plasticity for the trading instrument. But once again I’ll remind you the profit is much less, a long extended time interval and a small selection of trading tools. I showed in more detail about this method of money management on TOP coins using the example of LTC / USD in these trading ideas: EDUCATION Pyramiding How to earn 52000 with a risk of 5% from 10000 1part EDUCATION Pyramiding money management. 2 part. Short LTC/USD The trading idea for this coin for 13 11 2019 is before pumping and leaving the accumulation zone. MATIC at the breakout zone of the downtrend Great growth potent
MEducation
by SpartaBTC
Pyramiding money management. 2 part. Short LTC/USD This is the second part of the training material on the method of capital management - pyramiding or scaling as it is also called. Let me remind you once again in the first part of working long with an uptrend, we earned $ 20,000 - $ 52,000 time. Read more about the process of working in long in this trading idea: Pyramiding How to earn 52000 with a risk of 5% from 20000 1part After the breakthrough of the upward channel and exit from a long position, a downtrend and a downtrend are formed for us on the LTC / USD pair. Here is my idea for June before breaking through the rising channel. LTC / USD June The trend is broken. A downtrend and a downtrend formed. Here is my trading idea for August: SHORT LTC uptrend is broken. Trading in the downward channel. LTC / USD August ______________________________________________________ Let's go back to our example of LTC / USD money management by pyramiding in a downward channel. When working long in an uptrend, we earned $ 52,000 on this coin from an initial deposit of $ 20,000 . Round up to $ 50,000. Divide the amount into 3 parts of the entrance. A less risky entry point is the first, like a coin at the beginning of its downtrend and a big profit from the uptrend. Therefore, the first purchase will be a large amount. First purchase - $ 30,000 Second purchase - $ 10,000 Third purchase - $ 10,000 Stop loss is always 5% and moves behind the price of a downtrend. Stop loss should always be behind the downtrend line. (outside the upper boundary of the downward channel). Breaking it will mean a potential change in trend. _____________________________________________________ As a result of currently open trading deals, we have a profit: 1 purchase for $ 30,000 + 42% = $ 42,600 (net profit $ 12,600) 2 purchase for $ 10,000 + 19% = $ 11,900 (net profit of $ 1900) 3 purchase for $ 10,000 + 0% = as soon as we opened a deal (there is now an option to break the downtrend). The risk is always 5% The total net profit of work in the downward channel is currently + $ 14,500 $ 6,400 total position ______________________________________________________ If all 3 sales target work out as planned, then the potential from the entry point: 1 purchase - $ 53400 (net profit of $ 23,400). 2 purchase - $ 17,000 (net profit of $ 7,000). 3 purchase - $ 16,200 (net profit of $ 6,200). Total short profit: $ 86,600 (net profit $ 36,600). _____________________________________________________ If we take into account the work in an uptrend that we started with $ 20,000, then the net profit is $ 66,600 and this is on the same coin with a 5% risk and during this period we will only make 8 transactions. This is not fantasy, this is reality. I worked like this for more than a year on the ETH / USD pair in the downstream channel, all the ideas and work in the channel were published in my chat, also partially had ideas here, for example this one for December 2018 I complicated the work a little, but I increased my profits several times, I worked from trending channels. Also, most of the trading transactions were made from the trend lines of the internal channel. This trading idea for December 2018, but I started trading this downward channel from March 2018. ETH / USD _______________________________________________________________ Money management by pyramiding or scaling. The pyramiding method of money management (scaling) today is very popular among traders with experience. The essence of this method is the sequential opening of several transactions on the trend. We increase our position as profit grows, not loss. Pyramiding method of money management is perfectly combined with a positional trading strategy. Also, this method increases the deposit well when a trader trades in upward (long work) and downward channels (short work). Pyramid trading is a strategy that involves adding a new position to an existing profitable position. In other words, these are purchases or sales in order to add to an existing position, after the market has developed movement in a profitable direction for you. You are increasing your position. At the same time, the size of each next transaction may change taking into account the result of the previous one, that is, the position increases when you make a profit in the previous transaction to increase the deposit at a faster pace or after receiving a loss to accelerate the exit from the drawdown. This is the main advantage of using pyramiding in trading. If you did everything right, then do not expose your trading capital to additional risk. In fact, you reduce risk as the market moves in a profitable direction for you. The main thing is to correctly determine the trend and "sit" on it. The most difficult moment is to determine the beginning of a trend. On a bull trend it is better to always work on the bull side; on a bearish trend , on a bearish side. Always follow the trend! However, just as pyramiding can be profitable, it can also be dangerous if used improperly. The main thing is to determine the trend correctly. Many experienced traders consider this method the only possible way to quickly disperse the "deposit". One well-defined trend lasting only 1-2 weeks can double, triple the deposit with the right approach. Moreover, the risk is only 2% -5%. It is very important, do not confuse averaging and pyramiding, since these two approaches are completely different. Averaging occurs when the price goes against our position. And pyramiding is the other way around when the price is in your favor. Pyramiding allows you to achieve a super effective profit / risk ratio by transferring stop loss as the trend moves in your favor. ______________________________________________________ How to carry out a set of positions according to the trend, when to enter. Another important issue in pyramiding is: when do you actually enter a deal, gain a position more? The answer to this question can be divided into several approaches. Each of them has its pros and cons and in different situations will give different results. Just who is comfortable and who is more used to what they trade. Entrance to the transaction during the construction of the "pyramid": 1) On kickbacks. 2) On signs of continued movement. For example, it can be a powerful volume entry or a hammer candlestick pattern. 3) During the breakdown of important levels. ___________________________________________ How to use stop loss when building a "pyramid". Naturally, with pyramiding, stop loss is used. It is recommended to use a separate stop for each entry (to buy the position). As the trend develops, it should be pulled up. For example, I use 2 stop loss. Regardless of how much I had as the trend of inputs on kickbacks grew. The first is the top, which is about 30% of the entire position. As a rule, it is equivalent to the stop loss level of the last entry (buy by trend). The second is 70% of the position, this is when the trend breaks. Both stop losses are tightened as the trend grows. It is logical to use stop loss outside of some important levels. The trader as a whole should decide on the overall risk that he is ready to bear. For example, it is 3% -5%. Therefore, it is necessary to calculate the following positions in such a way that, taking into account the profit of the previous steps, compensate for the loss of the subsequent ones and keep within 3% -5%. You need to understand that with the correct determination of the trend, and the correct scaling of the pyramid, a loss of 3-5% is purely arbitrary, as long as you have a stop knocked out, you can already double or triple the total profit. The main thing with the price increase is not to forget to tighten the stop loss. And so put so that they are not knocked ahead of time. As a rule, I go out when stop loss is touched, just two, as the first one can knock out, and the price can go up further. It is also worth adding that sometimes on some coins due to their volatility , their feet are knocked out by 5%, so that this does not happen, the size of the stop is not so important as the moment of entry. ________________________________________________ Profit taking. How to take profit when managing money using the pyramid method? There are several different methods of closing positions: 1) According to the planned profit. For example, you planned to take profit + 100% from this tool. You have reached your take profit. We left the position, took profit and forgot about this tool. 2) With a slowdown in profit growth. For example, you have already doubled the profit on this trend and this is quite enough for you. The trend has moved in a lateral movement, profit is not growing, or growing slowly. It is more advisable for you to close this profitable deal and transfer the profit to the trend that is emerging, thereby building a new "pyramid" on a more rapidly growing trend. 3) At the first sign of a trend reversal. Not breaking through important resistance levels, reversal patterns, breaking the trend line . 4) By tightening stop loss. Knocked out stop loss. Depending on which stop loss ordering technique you use, either single or fractional for each entry separately. Stopped, took profits and forgot about this trading tool. They began to search for a new instrument with a good entry point at the stage of trend emergence. Started the construction of a new "pyramid". In my opinion, a reasonable solution is to partially take profit at some maximum levels with the trend growing. I am also part of the position about 30% aggressively trading increasing the asset. An important point at local maximums I sell these 30% almost completely, I already shop a large amount of assets from the support if I trade in an uptrend. As the trend progresses, I constantly pull up the lower stop loss (main position). 70% of the position is exited when the trend unfolds completely. _______________________________ Benefits of money management by pyramiding or scaling. Pyramiding works well with strong steady trend movements. The advantages of pyramiding: 1) the bistro is increasing the deposit. 2) minimal risks, and with the development of a trend, there are no risks. 3) psychologically comfortable trading due to the absence of great risks. _____________________________________________________________ Disadvantages of money management by pyramiding or scaling. As you already understood, pyramiding works well in the trending market. If the market turns into a flat or a trend movement is accompanied by deep pullbacks, then the pyramid can be destroyed very quickly. On few liquid, weak instruments, this method does not work! On cryptocurrencies, this method only works on TOP. Coins such as BTC , LTC, ETH. This method does not work: 1) In lateral flat movement. 2) With a weak trend. 3) In a trend with deep pullbacks, in which there will be uncertainty about further movement and they will knock out stops. _______________________________________________________________ We all heard the well-known trade axiom: reduce your losses, and give the opportunity for profit to grow. This is the aspect of money management in your trading system that issues major winners. Money management throws aside the subjective sensations present in people. Richard Dennis
BITFINEX:LTCUSDEducation
by SpartaBTC
Pyramiding How to earn 52000 with a risk of 5% from 10000 1partPyramiding. How to earn $ 52,000 with a risk of 5% from 10,000 1 part. LTC/USD Jobs in Long. Money management by pyramiding or scaling. When building a "Pyramid" from money using the pyramid method - your foundation of the pyramid is knowledge and experience. One of the main features of this method is minimal risks with high rates of income. In let's look at an example on the chart. LTC is a strong uptrend. Entering a transaction is not from the bottom of the price itself, but when the trend is confirmed. Trading only according to the trend, exit of the price for trend aisles - means exit from the position. Stop loss is always 5% below the uptrend line that you are trading. As the price rises, the stop loss pulls up. This is very similar to positional trading. But unlike position trading, you buy an asset as the trend develops, thereby increasing the position. From the example, we see that $ 20,000 is allocated for the coin. They are broken into at least 3 parts. 1 entry is the largest at the beginning of the trend-$ 10,000. The next 2 entries as the uptrend develops for $ 5,000. Risk is absolutely always observed 5% of the position. Breaking the uptrend line means a complete exit from the long market position. If you are not sure that the trend has finally reversed, you can exit part of the position. In this example, the profit was $ 52,000 + $ 32,000 net. I also want to emphasize, we did not buy at the very lowest prices and did not sell at the very peak of the price, 2 transactions were done quite already at an expensive price. The main thing is to follow the plan, understand what you are doing and what is happening. It is necessary to kill the “herd instinct” in oneself, try to buy the cheaper, sell the more expensive, buy for good luck, work without a strategy and plan. You work like everyone else - it will be like everyone else - nothing! ________________________________________________________ Pyramid mechanics in numbers. The amount allocated for this coin is $ 20,000. Broken into 3 parts $ 10,000, $ 5,000, $ 5,000. Profit from purchase №1 of $ 10,000 + 225% = $ 32,500 (net $ 22,500). Profit from purchase №2 5000 $ + 145% = $ 12,250 (net $ 7250). Profit from purchase No. 3 of $ 5000 + 45% = $ 7250 (net $ 2250). Total profit for all 3 purchases $ 52,000 Net profit $ 52,000-$ 20,000 = $ 32,000 The risk has always been 5% Next, I will describe in more detail this method and all the nuances. _______________________________________________________________ Money management by pyramiding or scaling. The pyramiding method of money management (scaling) today is very popular among traders with experience. The essence of this method is the sequential opening of several transactions on the trend. We increase our position as profit grows, not loss. Pyramiding method of money management is perfectly combined with a positional trading strategy. Also, this method increases the deposit well when a trader trades in upward (long work) and downward channels (short work). Pyramid trading is a strategy that involves adding a new position to an existing profitable position. In other words, these are purchases or sales in order to add to an existing position, after the market has developed movement in a profitable direction for you. You are increasing your position. At the same time, the size of each next transaction may change taking into account the result of the previous one, that is, the position increases when you make a profit in the previous transaction to increase the deposit at a faster pace or after receiving a loss to accelerate the exit from the drawdown. This is the main advantage of using pyramiding in trading. If you did everything right, then do not expose your trading capital to additional risk. In fact, you reduce risk as the market moves in a profitable direction for you. The main thing is to correctly determine the trend and "sit" on it. The most difficult moment is to determine the beginning of a trend. On a bull trend it is better to always work on the bull side; on a bearish trend, on a bearish side. Always follow the trend! However, just as pyramiding can be profitable, it can also be dangerous if used improperly. The main thing is to determine the trend correctly. Many experienced traders consider this method the only possible way to quickly disperse the "deposit". One well-defined trend lasting only 1-2 weeks can double, triple the deposit with the right approach. Moreover, the risk is only 2% -5%. It is very important, do not confuse averaging and pyramiding, since these two approaches are completely different. Averaging occurs when the price goes against our position. And pyramiding is the other way around when the price is in your favor. Pyramiding allows you to achieve a super effective profit / risk ratio by transferring stop loss as the trend moves in your favor. ______________________________________________________ How to carry out a set of positions according to the trend, when to enter. Another important issue in pyramiding is: when do you actually enter a deal, gain a position more? The answer to this question can be divided into several approaches. Each of them has its pros and cons and in different situations will give different results. Just who is comfortable and who is more used to what they trade. Entrance to the transaction during the construction of the "pyramid": 1) On kickbacks. 2) On signs of continued movement. For example, it can be a powerful volume entry or a hammer candlestick pattern. 3) During the breakdown of important levels. ___________________________________________ How to use stop loss when building a "pyramid". Naturally, with pyramiding, stop loss is used. It is recommended to use a separate stop for each entry (to buy the position). As the trend develops, it should be pulled up. For example, I use 2 stop loss. Regardless of how much I had as the trend of inputs on kickbacks grew. The first is the top, which is about 30% of the entire position. As a rule, it is equivalent to the stop loss level of the last entry (buy by trend). The second is 70% of the position, this is when the trend breaks. Both stop losses are tightened as the trend grows. It is logical to use stop loss outside of some important levels. The trader as a whole should decide on the overall risk that he is ready to bear. For example, it is 3% -5%. Therefore, it is necessary to calculate the following positions in such a way that, taking into account the profit of the previous steps, compensate for the loss of the subsequent ones and keep within 3% -5%. You need to understand that with the correct determination of the trend, and the correct scaling of the pyramid, a loss of 3-5% is purely arbitrary, as long as you have a stop knocked out, you can already double or triple the total profit. The main thing with the price increase is not to forget to tighten the stop loss. And so put so that they are not knocked ahead of time. As a rule, I go out when stop loss is touched, just two, as the first one can knock out, and the price can go up further. It is also worth adding that sometimes on some coins due to their volatility, their feet are knocked out by 5%, so that this does not happen, the size of the stop is not so important as the moment of entry. ________________________________________________ Profit taking. How to take profit when managing money using the pyramid method? There are several different methods of closing positions: 1) According to the planned profit. For example, you planned to take profit + 100% from this tool. You have reached your take profit. We left the position, took profit and forgot about this tool. 2) With a slowdown in profit growth . For example, you have already doubled the profit on this trend and this is quite enough for you. The trend has moved in a lateral movement, profit is not growing, or growing slowly. It is more advisable for you to close this profitable deal and transfer the profit to the trend that is emerging, thereby building a new "pyramid" on a more rapidly growing trend. 3) At the first sign of a trend reversal. Not breaking through important resistance levels, reversal patterns, breaking the trend line. 4) By tightening stop loss. Knocked out stop loss . Depending on which stop loss ordering technique you use, either single or fractional for each entry separately. Stopped, took profits and forgot about this trading tool. They began to search for a new instrument with a good entry point at the stage of trend emergence. Started the construction of a new "pyramid". In my opinion, a reasonable solution is to partially take profit at some maximum levels with the trend growing. I am also part of the position about 30% aggressively trading increasing the asset. An important point at local maximums I sell these 30% almost completely, I already shop a large amount of assets from the support if I trade in an uptrend. As the trend progresses, I constantly pull up the lower stop loss (main position). 70% of the position is exited when the trend unfolds completely. _______________________________ Benefits of money management by pyramiding or scaling. Pyramiding works well with strong steady trend movements. The advantages of pyramiding: 1) the bistro is increasing the deposit. 2) minimal risks, and with the development of a trend, there are no risks. 3) psychologically comfortable trading due to the absence of great risks. _____________________________________________________________ Disadvantages of money management by pyramiding or scaling. As you already understood, pyramiding works well in the trending market. If the market turns into a flat or a trend movement is accompanied by deep pullbacks, then the pyramid can be destroyed very quickly. On few liquid, weak instruments, this method does not work! On cryptocurrencies, this method only works on TOP. Coins such as BTC, LTC, ETH. This method does not work: 1) In lateral flat movement. 2) With a weak trend. 3) In a trend with deep pullbacks, in which there will be uncertainty about further movement and they will knock out stops. _______________________________________________________________ To be continued...
BITFINEX:LTCUSDEducation
by SpartaBTC
2
$IVZ Strategies on a Value Growth StockIVZ has low P/E, D/E, and P/B ratios, despite growing revenue and dividends. Therefore, my 5 year outlook is bullish. I suspect the best times to buy are around a low of $19.40 for a short turnaround, but the price may get as low as $18.58 in as little as 2-3 weeks if the impulse from Jan-Feb echos the latest high. Other possible low points for the suspected echo impulse, using fib levels, are 18.65, 18.93, 19.14, and 19.29. Pyramiding your buys using these levels should give a relatively low average position for long term growth, which can be sold off, probably during the year, for a profit to adjust the weight in the portfolio back to a reasonable level to meet your portfolio diversity goals. Despite the effort in averaging down and out, I do believe it is a worthy strategy to reap greater returns rather than buying once when it looks good. The average price per book value for this stock is less than one and averages greater than 1.65, according to Yahoo. To reach equivalent value if book value remained constant, which it will not, the factor is 1.8x. Earnings are expected to rise, so book value itself will rise over time. Book value has risen 50% in the past ten years, so a 5 year price target given today's suspected low and a 1.2x oversold factor (because who sells at value?) will be 19.40*1.8*1.25*1.2 = $52.38 or about a 170% return on investment, plus another $6 in 5 year straight dividends at $0.30 per quarter. Due to the volatility and bullish/bearish runs with bulls beating bears in the end, this makes a great swing trading opportunity. When the stock trends above 1.67% monthly or 0.38% weekly, the stock is performing greater than its exponential averages: Average Exponential Monthly (%) Growth: (2.7^(1/(12*5))-1)*100 = 1.67% Average Exponential Weekly (%) Growth: (2.7^(1/(365/7*5))-1)*100 = 0.38% This is likely to occur now and less likely over the course of 5 years. Therefore, linear price increments may be more useful in determining rapid growth in earlier stages. In which case, when the stock trades above $0.55 a month or $0.13, the stock is performing better than its linear averages: Average Monthly ($) Growth: (52.38-19.4)/(5*12) = $0.55 Average Weekly ($) Growth: (52.38-19.4)/(5*365/7) = $0.13 Right now, we are in a bit of a bull swing since Dec 24th, as with most (financial sector) stocks. There is some potential to ride this out for a while, so adjust your alerts to watch for the bear once it crosses down on the average expected growths. This stock has a tendency to go up in the early mornings around 10:00AM, so that would be your time to sell if the previous week was low and would not be your time to get hopeful.
NYSE:IVZLong
by ValueMyAsk