Pyramiding is a method that is often used to accumulate profits in scalping. But pyramiding is not so easy. If you get the timing wrong, you can lose a lot, so this is a tactic for intermediate players who are used to trading to some extent.
What is pyramiding?
Pyramidting is a strategy to increase the number of balls. I put in the first entry at a certain point, and when I get about 10 pips unrealized profit from there, I will put in a position again. The standard is to lower the lot, but there are times when the lot is increased beyond the initial point. In this way, it is a strategy to increase positions as it goes forward, and if it goes well, you can make many times more profit than usual, but if it fails, there is a risk of losing a lot.
Assuming it’s a trend
This method of having positions like a pyramid is based on the premise that it is a trend. Your ability to read large market trends will be tested. In order to be able to win, we recommend analyzing and acquiring knowledge before trying. The timing of adding additional entries is important. Use your funds simply and wisely when ordering. Mental health and money management are also important factors for winning.
Check with moving average line
Use indicator tools such as moving averages to detect and confirm trend changes. It is important to draw the candlestick lines of the low and high prices; if you go in the wrong direction, you will lose a lot whether you buy or sell. In order to make money, you need to be aware of the direction and patterns. If you make a mistake in your judgment, you may end up in a microwave or a contrarian position like a pick-up.
scale down pyramiding
Scale-down pyramiding is famous for pyramiding. In general, we will increase the number of lots while reducing the number of lots by half. It is a method to buy more from 10 lots → 5 lots → 2 lots → 1 lot. In general, we will increase the number of lots while reducing the number of lots by half. Apart from this, there is also an inverted pyramid type trade. This is a method of buying 1 lot → 2 lots → 3 lots → 5 lots. However, not many people use this method.
equal position pyramiding
Equal position pyramiding is a method of increasing positions with the same lot number. If you decide 5 lots, you will continue to buy 5 lots at a time. This will result in larger profits and losses than scaling down.
pyramiding with scalping
In general, it is common for many traders to incorporate pyramiding in day trading and swing trading. That should be the case, and the increase ball strategy is because it is difficult to enter the next entry if the first position does not progress to some extent. Therefore, there are not many people who do pyramiding with scalping. The points when pyramiding with scalping are as follows.
big profit and big loss
With scalping, pyramiding can be a big loss or a big profit. When it comes to pyramiding with scalping, the entry interval in one position is narrow, so there is a big risk. If it reverses at some point and goes backwards, all the positions you have put in will be unrealized, and it will be a pretty tough situation.
keep an eye on the chart
In scalping, pyramiding is all about entry timing, so you have to watch the chart all the time. Therefore, it requires a lot of concentration. If it goes backwards at some point, you have to cut your losses quickly. Therefore, it is necessary to accumulate while watching the reaction of the chart.
need skill
In scalping, pyramiding is more difficult than day trading or swinging. This is because scalping itself is a very timing-sensitive trading method. Therefore, if you are not used to it, it is recommended that you start with day trading and swinging instead of scalping. In addition to that, you should first get used to scalping itself.
Close spacing between positions
In scalping, pyramiding has narrow intervals between positions. Scalping itself will settle in a few seconds at the earliest. Therefore, it requires a very quick decision whether to cut losses, take profits, and whether to enter. Regardless of how the result will move, if you do not decide the loss cut point and profit take point in advance, you will be in a lot of trouble.
Exness is for scalping
Exness is for scalping. This is because the spread is extremely narrow. Therefore, if you like scalping, please register with Exness and start trading. Since opening an account is free, please refer to the following article to open an account.
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