increasing size on a winning position

Does any of you increase lot size if have a winning position? Such as:
1) Enter a limit, limit hits, open a new position for larger lot size.
2) Same as "1", but decrease limit amount?
3) Or other?

Hi eagle
Drop into this thread
http://www.forexfactory.com/forexfor...ead.php?t=6578
There's a major discussion going on now
Peter

That's like the opposite thread to this one.

The question is of increasing size on a losing position.

I think there's a right time to do both, and it basically comes down to confidence, for whatever reason, that the price will move in your favor.

Hi binary you're right, it's getting heavy in there now and I needed to read the whole thread myself
So I'll pose my question here

Clarification of Scaling Into A Trade requested.

In the attached chart the trade was in profit, SL had been moved to BE +16 (1.2650) and the Fibs drawn as the price price retraced from 1.2678. The price came back to the 38 fib (circa 1.2660) and the trend still appeared strong.
I was tempted to add to this trade, leaving the SL at 1.2650 and the TP at its original 1.2690. My reckoning was that I was risking 10 pips for a potential gain of 30 pips.
Discretion being the better part of valour I held off, in hindsight it would have been a good trade, but with the volatility of Forex I was unsure.
Is the safer method to start with multiple lots, and close positions as the trade progresses, moving SL to lock in profits as the trade progresses, leaving the last lot to run its course?
In my mind Averaging (or Scaling?) up seems to offer better profit potential.
As I'm new to this, I would prefer to run with the safer option until my trading achieves better consistency.
Peter

This will help you. I think is very clear and concise.
I found it on another forum a long time ago.
Depending of your risk aversion (this are the key words) you choose the method.

I'll have a read and see if I can play the ideas next week if I see an opportunity.

Peter

As I'm trying to develop small edges to my trading, I've realised that I'm not always maximising my wins. This last week I've been placing orders above or below the current price, waiting for it to hit or not.
I'm now thinking that I need to get into a trade earlier without the downsides inherent in normal market orders.
To keep this post as short as I can I'll assume a short trade.

My choices are as follows:

1) Sell Stop - This would be my usual entry strategy picking an entry point off the hourly chart. Option would be to move down to shorter time frames, I'm using 1-hr charts and looking to trade in the direction of the daily chart (which gives a longer-term perspective). With the one hour chart I have the advantage of trend confirmation before I trade, but I'm missing vital pips early in the move. So, as long as my entry rules still apply on a 30 or 15 min chart, I carry on applying this entry strategy using the shorter time-frame charts

2) Sell Limit - On the hourly chart look for retracement from the current trend (using Fibs and/or broken S/R levels) and then switch to shorter time-frames to assess and set a limit order based on interpretation of those areas. Generally I feel that these retracements can take a little time to fully develop (not always I know) so I think I would have more time to assess the best probable limit entry.

3) Combination OCO - Place both orders and set them to OCO, so if the sell limit misses I still get the sell stop picked up assuming the trend develops as my signals dictate. Obviously if the sell stop is actioned the sell limit is cancelled.

4) Combination - Scaling up - Place both orders as above, but leave them as a sort of straddle. Assuming the Sell Limit puts 1 lot on, then as the trade develops the Sell Stop automatically adds another lot

As I haven't seen this sort of method discussed on the forum, I'm wondering if Nos 3 & 4 are too risky.
Comments please

Peter

Here is a nice article about this topic: http://www.investopedia.com/articles.../ScalingUp.asp

Hi bugscoe
I've got that from a post in another thread, and it answers a question I had about scaling up.
My question is more to do with finding more elegant entry methods to try and gain a few extra pips on a trade, I'll try and master that (if it's possible) and then as my confidence in my method grows (and my account) I'll try this scaling up tactic.
Appreciate you taking the time to respond though, every little helps.

Peter

Here is a strategy (for simpification, not incl. cost of spread) for
increasing position size if you get in on a trend:

Let's say that your brokerage offers 400:1 leverage and you have a
mini account, and that gbp/usd is at 1.8600.

You enter long at 1.8600 for .1 lots and set a stop at 1.8570 and a
limit of 1.8630. Your risk is $30 and your potential gain is $30.
Your limit hits and your account is up $30. You notice the trend is
still up. Then you re-enter long at 1.8630 for .2 lot size and set a
stop of 1.8615 and a limit of 1.8645. The risk/reward is the same
as the 1st position, $30 risk, potential $30 gain, but your position
has to move up only 15p to make the same $30. However, one
downside to this is that more of a chance of getting stopped out
is greater due to smaller stop. The price then hits 1.8645. You are
now up $45 (+30 on 1st position, +$15 on 2nd position).

Contrast this with not taking profits at set intervals:

You enter long at 1.8600 for .1 lot size, set a stop of 1.8570.
Your risk is $30. The price goes to 1.8630, you move the stop to
break-even at 1.8600. The price goes to 1.8645 and then you move
your stop to 1.8615. The price then retraces to 1.8615. You are
up +$15 on this trade vs. the $45 you could have made using
the 1st strategy.

Comments anyone?

Summary from my book
http://www.forexfactory.com/forexfor...?t=6222&page=2

~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~

So let me just give you the pictorial summary of this chapter..


This is the life that's waiting for you when you AVERAGE DOWN:
http://www.rageboy.com/death.jpg



This is what will be waiting for you when you AVERAGE UP:
http://www.strangecelebrities.com/im...tent/13331.jpg

Any questions?? I didn't think so.