I have worked on this idea in the spirit of Vegas. Cut losses, and let winners run. A pyramid is a devastating weapon of choice when it works. The question is WHEN will it work.
Case and point: In 2006 we saw GBP/JPY move 3000 pips in one direction. It was an investor's dream. But what about 2005? It was sideways the whole year. Trying to pyramid would have lost money repeatedly.
A second example: 2005 CAD/JPY would have been an excellent year to pyramid.... but 2006 was sideways.
You never know when a trending year will hit. It is gambling and chasing pyramids can make you financially poor.
I am stepping down from this thread for awhile. Perhaps some brilliant reader will figure out a way to perfect the hedging strategy I proposed a few weeks ago. A hedge strategy could create a nearly risk free approach.
For now, I will return to graduate school and put forex behind me unless compelling new evidence is presented.
Thank you for your interest.
Tom
Case and point: In 2006 we saw GBP/JPY move 3000 pips in one direction. It was an investor's dream. But what about 2005? It was sideways the whole year. Trying to pyramid would have lost money repeatedly.
A second example: 2005 CAD/JPY would have been an excellent year to pyramid.... but 2006 was sideways.
You never know when a trending year will hit. It is gambling and chasing pyramids can make you financially poor.
I am stepping down from this thread for awhile. Perhaps some brilliant reader will figure out a way to perfect the hedging strategy I proposed a few weeks ago. A hedge strategy could create a nearly risk free approach.
For now, I will return to graduate school and put forex behind me unless compelling new evidence is presented.
Thank you for your interest.
Tom