adding to winning trades, do you actually do this or just talk about it
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classic trading book wisdom: cut losers fast, add to winners. seems simple. in practice ive found adding to winners genuinely difficult because:
- the moment a trade goes well, my brain wants to take profit not add
- adding raises my average entry, making it 'worse' on paper
- if the trade reverses after i added, the loss is much bigger than if id taken profit on the original
for those who actually do pyramid into winners successfully, whats your rule set? specifically: when do you add, what size, where does the stop move?
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i pyramid into trends, never into ranges. rule: initial 1R risk position. when price moves 1.5R in my favor and forms a clean new structure, add 0.5R risk. trailing stop moves to break-even on original after first add. second add at 3R if it keeps running, stop trails to lock 1R minimum on original. its mechanical so i dont have to argue with myself.
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+1. mechanical rules are the only way pyramiding works in practice. without them every add feels like 'should i?' and you either skip the add (missing the big winners) or add at random (blowing up). codify or skip.
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R = your initial risk on a trade in dollars. if you risk $200 on a trade, that's '1R = $200'. when the trade is in profit by $200, that's '1R of profit'. R is just a unit to measure trades relative to the risk you took, regardless of dollar amount. very useful for comparing across trades and accounts of different sizes.
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i tried pyramiding for years and was bad at it. switched to a 'partial profit + runner' approach. take 50% off at 1.5R, move stop to break-even, let the rest run wiht trailing stop. captures most of the pyramiding upside without the psychological friction of adding.
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you all read the same books. theyre wrong. cut winners fast, add to losers, become rich. nobody does it because the books said not to.
most of my best months come from 1-2 trades where i actually let myself add. the rest are average. its a skill worth building
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