Dislikedhey nubcake you are actually correct on your assumptions, yes, according to Average range and volatility one needs to adjust position sizing according to the least possible level of risk.
having said that.
i have experimented with many different skews of pyramiding and fti phi: pi ratio holds up in practice and theory. there is much to learn about option barriers, DNTs, one touch, digital, and exotic options, as well as clusters stops. believe me the hunt for this profitable cascade is real.
you can profit from it by following along on suspected...Ignored
my eyes blurred and i clearly wasn't particularly thinking about it too hard.... but where i previously referred to pi i should have been referring to phi. but, i think that's obvious to anyone who is more awake than i currently am.
that said, the whole phi to pi... pyramiding and averaging in are simply two sides of the same coin. it's all still just a type of pyramid and does not in any form require one to use phi and / or pi. IF you are going to 'rescue' (in normal terms 'average in') you are simply increasing your risk by adding size that is greater than the current position size in order to move the breakeven closer. that is what averaging-in is all about. in reality, you can use a smaller size to average in, but this puts the breakeven point further away and likely defeats the whole purpose of what you are trying to achieve (but, it depends). all elementary stuff. but on the flipside you could use an even larger progression than your pi progression (again, it depends).
your whole concept of phi to pi, or pi to phi, is just a rigid pyramid. phi and pi really have nothing to do with it, and are purely convenient progressions based on a perfect-world scenario that doesn't necessarily exist.
you might be stuck using pi as your averaging-in progression since you don't have a stop and are trying to maximize your breakeven point versus increased risk, but the reality is that it all depends.
phi to pi just doesn't make sense unless it's a perfect world and all things are equal and balanced. it's ALL just pyramiding and averaging in using 'rigid' progressions.
actually, clarification... phi / pi, aren't quite a perfect pyramid, rather, they are a perfect pyramid in terms of moving the breakeven point significantly closer for an average-in or increasing potential reward when adding size to a position while keeping the breakeven point somewhat far enough away. in terms of trying to get out of shit positions fast, and stay in good positions for extended periods of time, then the whole phi / pi scenario is a perfect pyramid progression based on a perfect world scenario of price retracing to some 50% area per trend-up or trend-down out of a range.