When Do You Add To Your Winning Trade? Look At The Crude Oil Chart
When Do You Add To Your Winning Trade?-----This has always been a very interesting question because it can create a situation of going from rags to riches to riches to rags in a very short amount of time. Many times I see traders abuse pyramiding or adding to positions with utter lack of any type of money management system in place and letting it ride which usually ends up in a complete wipeout of capital and sometimes even worse. Commodity prices can move very quickly with large gains or loses like we experienced in 2008 crash of stock and commodity prices, so you always have to use stops and not fall in love or marry a position. My answer to this question is add only once to the trade if that position has made you at least 1%-2% of your account balance while still having stop losses on all positions that equal 2% loss at a maximum risk. Remember your stop loses will be different on both positions because of the fact that you entered those trades at a different date and price. If you would like to talk to Michael Seery about trading concepts or strategies please call him at 800-615-7649.
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