Good point to keep in mind, Dale. Thanks for all your good input and vibes.
Happy Trading,
Norm
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Mastering the markets is a pdf version of one of Tom Williamās books. Itās authorized to be downloaded free
All you have to do is Google it and links will come up.
I think itās definitely worth the read
KC
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Who in the HELL is TOM Williams??? LOL!!! Only joking (although I was talking about BILL Williams).
I downloaded the book (before you removed the link that is). Looks like a good book on VSA I must say (from just a quick scroll through it anyway).
HOWEVER and back to Norm and his pyramiding conundrum.
Below is a link to Bill Williamsā Trading Chaos Second Edition (found it on the Internet but itās the same book to which I referring i.e. evidently somewhere in the cobwebs of my mind there exists some type of order). Take a look at the part entitled āAsset Allocationā. Itās on page 155 of the book itself and itās page 188 in Adobe Reader. And now the picture becomes clear (after a brief refresher that is). Good reason for REVERSE pyramiding (which actually is what your original question was about in fact). With straight line adding or even starting with smaller to larger which I guess is ānormalā pyramiding: the average price on the trade increases almost exponentially. This has the effect of your stops moving ever closer and closer and closer as the trade goes in your favor. This may not be a good thing as it could result in your being stopped out for no other reason than that your stops are were just too close. With REVERSE pyramiding the total opposite happens i.e.the average price of the trade still improves but to a lesser degree each time you add a position. Your stops therefore donāt move that quickly closer to your average price thus leaving the trade far more room to move. But read the section i.e. OBVIOUSLY itās explained in a lot more precise and clear and to the point fashion than Iām capable of doing.
Bill Williams - Trading Chaos - Second Edition
His books are not bad. Dated and jaded though in my opinion (sounds a bit like me). The parts about the Alligator and all that jazz anyway. However: Iād not discount FRACTALS. Matter of fact and if these markets keep tanking Iām sure going to take a look at FRACTALS again for when they eventually turn up again. Sure would be nice to be able to ride a trend out for a change. Not something new to me though. I just never had the patience and the discipline years ago to wait for these trades to mature. I sure do believe I have both and in spades nowadays.
And matter of fact: trading FRACTALS with REVERSE pyramiding is a pretty good method to be honest (I seem to recall spending a lot of time on this too some years back). Unfortunately he flipped flopped on FRACTALS and the methods for trading them between the first edition and the second edition and frankly made it way more complicated than it need be. Also not for the feint of heart or under capitalized thatās for sure i.e. some pretty wide stops which obviously necessitates taking much smaller positions than our average budding FOREX millionaires trying to scalp the markets.
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Completely miss that! Early in the morning reading!! havenāt finish my pot of coffee!
BTWā¦ went through the first three seasons of The shield again, skipped the next three and onto the final 7th season.
Not only are you a good actor, youāre total bad@ss! 
KC
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Hi KC and Dale,
Thanks for the tip, KC. I googled the book title, and indeed found it was authored by a Tom Williams, not Bill Williams, so I decided to pass it by. Thanks for the thought. 
Dale, I did download BWās book, and found the reference to Reverse Pyramiding on p. 155. Thank you for turning your house upside down to look for your copy and for searching out the page for me on the pdf! Thatās true help. Thank you.
Iāve got the pdf open to p. 155, but decided not to read it just yet. After all, it is 2 AM at the moment, so I do hope you understand 
Thatās what happens when youāre pushing age 75 and flop into bed at 8 PM for a nap.
Thank you guys,
Norm
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Thanks for the link @dpaterso I read the chapter on chaos theory as I have some knowledge from this book
After I looked it up I note the name of the Authour !
Does the application of the ā3 wise menā work ? I bought the book when it was pretty new in trading and I was trading the DOW but I never really applied it.
I have done the "3 pages of writing " recommended in the PDF,this morning and find it does seem to āClarify the mindā - I shall persevere with that for a while.
Iām not sure about his apparent āpushingā of his "courses thoā and I shall await your answer to my question above with interest.
Thanks for the PDF
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Believe it not not I was actually busy typing the below at the very time you were busy typing the above!!!
Iām being a bit unfair to good 'ol Mr. Bill Williams there to be honest. While Iām no great fan of the Alligator concept: some of the other stuff does have merit. One fine example really is his Market Facilitation Index or MFI. If you study it nice: itās nothing more than āpaint by number Volume Spread Analysisā. And itās included with MT4 everywhere. But you have to know how to interpret the different colors and how to act upon them. The only drawback is VOLUME. In FOREX you donāt, as a rule, get proper volume. Most of the time youāre just getting the volume being traded by the traders at your broker. And given that a huge percentage of them are wrong (as we well know): well thatās a bit of slippery slope Iād say. But it sure does merit when it comes to stocks and commodities. But again: getting the proper volume data is key (and it costs money usually to get these numbers).
Iām also of the opinion that his Fractals have merit. But then again: the Fractal Indicator is doing nothing more than identifying high and low swing points. But these are definitely tradeable if you have a decent system or idea as to how to trade them.
Same here. Was one of the first books I bought too. I got too hung up on his Awesome Oscillator at the time. And it cost me dearly!!! LOL!!! Personal opinion: too many wise men!!! LOL!!! That Alligator is nothing more than moving averages that lag. Thatās the problem. But let me say this (and please bear in mind it has been years since I read BOTH of his books on this): if you pull apart some of his ideas there is definitely something worthwhile there. For example (and if memory serves me correctly): thereās a part in the book where he discussed the Alligatorās jaw which, again if memory serves me correctly, is a 13-day SMA and itās āshifted into the futureā by a certain number of bars. Then there is a section which starts talking about how many barās signals you need to buy below this line and how many barās signals you need to sell above this line. Something like that anyway. Itās not bad stuff. And if the truth be told: I actually donāt think that I really gave it all a fighting chance. I know for certain I didnāt have the patience at the time to actually fully use this stuff. You know: opened one or two trades, didnāt work out, trashed the stuff and moved on to the next best thing. Rinse and repeat. And while youāre doing that the money is going out of the door.
Quite frankly and now that Iām back in this business: I may even take a good hard look at Wilderās stuff as well as Bill Williamsā stuff again (although I do implement some of Wilderās stuff still today in my trading system). As I mentioned before on another thread: I was forced to take a break from this business for a few years. And when I came back to it: things that I honestly could not get my head around during the first few years sort of just clicked into place. Now I will admit that Iām a slow learner so maybe that has something to do with it. I donāt know. Thatās not to say Iām thick as a plank!!! LOL!!! Iām just like that. Took me FOREVER to understand a particular programming language where others seems to pick it up easy. But now and after all these years: I can write software without referring to manuals or anything and with my eyes closed i.e. it just sticks eventually with me. Whereas some of the people I used to know cannot do this in spite of spending years coding in the same language. Itās just an example of course. Just me. Anyway as usual I ramble. Point is: it would be real nice maybe to visit upon some trend following systems again. I never really gave them a fair shot at the time. Obviously Iām rather hesitant given that the way I have been trading for a few years works for me and I really donāt have the luxury of being able to experiment with unknowns. But then again: I sure do have a lot of time on my hands. So letās see.
P.S.
The line I was talking about above may only have been detailed in his first book and not in the second edition. Iāll upload the first edition here too for reference.
P.P.S.
Scratch the above. I think itās in the second book and not the first (after just taking a quick look as noted below).
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Here you go:
Bill Williams - Trading Chaos - First Edition
I just had a quick trip down memory lane and scrolled through the above. I remember now that his system detailed in the first book was called the Profitunity Trading System. Also brought back memories though of starting out with something like MFI and then all of a sudden heās talking about Fib. numbers and Elliot Waves and blah, blah, blah. Seem to remember it getting a bit confusing.
Anyways. Have fun. Happy to help if I can. Seem to remember having a pretty alright grasp of this stuff at some point (although, as I say, it never turned to money but I donāt think he was to blame to be honest).
P.S.
Hmmmnnnā¦ In just looking through this stuff again itās coming back to me. In both versions thereās a dozen or so things that need to line up for a trade (I exaggerate but you get the picture). I think thatās what put me off actually. This being said: Iāve noted above that tearing some of this stuff down (one or two different aspects) to basics can have merit.
Bill Williamsā Reverse Pyramiding Method
Hi Dale,
I did return to consciousness and read BWās paragraphs on Reverse Pyramiding. For the sake of anyone reading this thread, Iāll summarize it to round out the approaches to the pyramiding methods presented in this thread.
You begin by determining the TOTAL amount youāre willing to invest on a trade plus any pyramid levels you might add. His example:
When you open a trade, you open it with just a very small amount of the total youāre willing to invest, because, at the open of a trade, youāre just testing it to see if it will really go your way. Letās say youāre willing to invest a TOTAL of 15 contracts in gold. When you open the trade, you open it with just one contract - your ātoe in the water.ā If it goes your way, and the trend gives you a second entry signal, open that with five contracts [yes, five as compared to the initial one], and so on. If the trend continues to give signals, the next should be four contracts, then three, then two. Youāve reached fifteen contracts, so no more investing in that trend. And, of course, bring up the rear on each addition with a trailing stop. He reports that those who adopted his Reverse Pyramiding method have, on the whole, more than doubled what they would have earned if they did not pyramid.
There! I just did my good deed for humanity for the year. As for me, I think Iāll still begin by adding, at each level, the amount I initially opened the trade with. How that works out will be my benchmark from where Iāll continue.
I would just like to add a word of caution for those who might need it. PROCEED WITH CAUTION, AND TEST! To use Billās example: If you profit one contract from before you move your trailing stop, great. But then, letās say you add five contracts as he suggests - and it bombs out. Youāre in the red four contracts. Iād say, get real good at pyramiding no more than your initial amount at each level before you bet the ranch - and make sure that, at each level, the trend and new signal are strong enough to carry you through to profit from that particular addition as if it were a stand-alone trade!
Happy Trading,
Norm
Late to the Party, I knowā¦ but found this in the Grid Trading Directory of an FX Site.
A nice and clean explanation of Pyramiding inā¦ Cheers
Edit: @dpaterso, Thanks for the Trading Chaos book linkā¦ orderedā¦
Very nice article. And yet another option for Norm.
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Hi TWB,
Never too late to come to the party, especially with some goodies for everyone.
Good article. Itās similar to Bill Williamsā method. Each bets a part of the total risk at each level; but whereas Bill starts out very small, then goes relatively large, then reduces gradually from there, this author scales in in equal increments.
Hereās the article Pyramid Trading Strategy (Double Your Profit Potential) that first clarified pyramiding to me more than any other as it is very simple, clear and straightforward; but the main thing Iād like to address is that he presents an alternative and, I imagine, a very common method: If one would normally open a trade with, say, a 2% risk, then open it with 2%; then, as the trade warrants, add 2% more at each level.
So, weāve seen at least three ways of pyramiding in this thread, and Iām sure there must be other ways of doing it, as well. As with many issues in forex, each of us needs to decide which way is appropriate for us.
Glad weāve hashed it out as much as we have. Perhaps others will contribute more. Iāve certainly clarified my perspective, and hopefully others have or will, as well.
Take care all,
Norm
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Iām not sure about this pyramiding business. Have you found it beneficial? Is there not a risk that in trying to implement the pyramid you take focus from market action in favour of an arbitrary system that does not create or enhance edge.
Hi Ropunzel,
I have not tried it yet. Iāve just āfinishedā polishing up a strategy that will include pyramiding if it works out in tests. I opened this thread to understand pyramiding better so that when I try it Iāll be more confident in the approach I choose.
Is it beneficial? Many very successful traders swear by it. Among them are Andy Perry (Capt. Currency) in his 3 Ducks strategy, Ed Seykota and Justin Bennett. One advantage that I see for pyramiding over seeking a brand new trade is that one will only pyramid in a trade that has already exhibited a strong trend and a strong new entry signal, whereas a brand new trade has yet to prove itself.
Hope that helps,
Norm
Agree with Norm. The trend is effectively the edge. The trend edge can be enhanced by entry from a pull-back. Either way, its good to add when the initial trade is already loss-free.
(I have in the past added pyramid trades simply on a scale basis and regardless of the price action as soon as price moved half-way to b/e on the initial trade but I feel this is too aggressive for the current forex set-ups.)
I donāt know why youāre both humoring that person. Itās pretty obvious to me that they donāt know what pyramiding is and this in spite of it being very clearly detailed and discussed ad nauseam on this very thread.
Now Dale, pyramiding isnāt a one-way street to riches. Its unfamiliar to most private retail traders and I think its legitimate to question it, especially as even though I love to do it I donāt find great opportunities for doing it currently as I used to pre-Trump-tweets and pre-Brexit. Also, there are different ways to do it anyway.
Easy, tigerā¦
Point is: READ whatās been posted and discussed and THEN ask questions.
What does watching market action have to do with pyramiding if I may ask??? Pyramiding is trade management. Nothing to do with the methodology used for the trade itself.
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Here. This is the risk I was concerned with. Adding to scale a scheme at arbitrary points which does not regard price action. Each trade you enter presents an independent and new risk.
A risk which needs to be assessed at the point of its entry rather than at the point of entry for a previous trade which has proven to be successful.
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Alright. Fair enough. I retract my comment above and apologize for it now that I understand what youāre getting at.
Iāll leave it to the others to explain. But suffice to say youād not be entering at arbitrary points. But your thought process on risk appears to be on the mark.