Adding On to Winning Positions

If it goes one direction along way the next most likely move will be the opposite direction, if not there must be a good reason why it continues.

@ OP

I add to positions, it's something that can bite you in the A** if you get greedy with it but this is how do it

Define a risk level you are more than happy to pay/lose if the trade does not work out for you. THIS IS THE KEY. With more experience you can define your risk level based on probabilities. More aggressive risk for higher probability trades and vice versa.

I trail the SL to a point that I would deem myself to be WRONG and add more, just keeping that risk level the same throughout the trade.

E.G say I Buy with a 30 pip SL and am happy to risk $30.. So My position is $1/ per pip. I then make 50 pips in the trade and am expecting a further 80 to 100 pips in the rally. I decide that my current SL is wasted in it's current position so move it up below strong support 10 pips higher than my initial entry price and 40 pips higher than where it started. This means my risk goes from $30 (30 pips) to -$10 (-10 pips). I have locked in a $10 profit... But we didn't come for $10 OP!

My total risk is now $30 + $10 = $40 and so I buy more at market which allows me another $1 a pip ($40/40 pips) as the market is now 40 pips away from my new SL.

So now my total position is $2 a pip and my risk is still just $30 with my new 40 pip S/L.

The main thing is not to move your S/L up just so you can buy more.. But to simply trail your S/L when you feel it is safe to do so and add to your trade accordingly. Always put the risk before the reward, otherwise it defeats the purpose.

I just have a spread sheet where I can quickly punch numbers in and it tells me how much to add. I can also adjust the risk through the trade to less or more if I wanted.

So all you're doing is managing risk and letting the rest take care of itself, not greedily trying to milk reward by moving the stop too close to the market just so you can buy more! Don't do that!

Anyway that's how I do it.

The reason that it continues could be because it is in a trend.
Certainly, there will be retracements and you never know whether the retracement will turn out to be a new trend.
And yes, these retracements will often happen after price goes in one direction for a "long way"
Problem is defining what a "long way" is.

well, one can always try to exit and reenter.

for example original signal buy @1.3000 stop 1.2950. Market goes to 1.3050. You sell half. Markets comes back to 1.3020, you now can buy bigger size with same stop at 1.2950.

trouble is if you sell at 1.3050 and price does not come back and best signals often do not, so you miss these.

This kind of thing could work, i will give it a try at next opportunity:

As I said before when I need to add positions I only add to losing positions (well is a different approach) but what is discussing here is to add to winning positions.

This video gives a good overview of how to operate the thing.

From my meagre experience with scaling-in and scaling-out, I know that not all setups are suitable for adding new lots in the "hope" that the move will continue in my favor. I found that Complex Pullbacks (CPB) and Test (TST) of strong support/resistance are most profitable when scaling-in.

Definitions:
TST - a test of support or resistance which is expected to hold.
BOF - a breakout failure, as price breaches an area of support or resistance and then reverses.
BPB - a breakout pullback, as price breaches an area of support or resistance and it holds.
PB - a simple (single-leg) pullback within a trend.
CPB - a complex (multi-swing or extended duration) pullback within a trend.

I'm still learning and convinced that scaling-in and scaling-out solved many of my personal trading dilemmas, which I hope to explain when I become successful. The setup pictures came from a commercial material I'm reading but it's common concept in ForexFactory threads.

Thanks, there are some solid ideas out there.

do we have any EA for this method of trading? Please share.