averaging down and pyramiding; a problem which i can't figure out....

[SimpleTrades]

Quote from emg:

Click this link http://www.elitetrader.com/vb/showthread.php?s=&threadid=222458

Emg, if you want to be able to profit nicely from something that is trading within a range, if you want to avoid the big hit, stealing all the accumulated profits, when if finally takes off outside of that range, you definately need a stop.

 

[oldtime]

here's one we used to do with grain spreads

the pyramid is set up just like bowling pins
4,3,2,1

you always start off with 4 cars (or if you're big some multiple)

add 3 to winner

add 5 to loser

etc.

sometimes it works

when it doesn't, it almost wipes you out (but not completely)

you can save your ass by getting back to 4 cars when the profit and loss cross

when it works you can make a lot of mistakes for a long time