At what stage in your open trades does your strategy tells you to add more position? How can one implement it in his strategy? What should he look out for when securing more position size? Is it even right to add more position after successful trade entry considering your strict risk management practices?
I like to add new positions to an existing one, but only after the original trade has moved into profit equivalent to its risk from entry to stop-loss. At that point I add a second position of the same size with an equivalent stop-loss risk and move the SL on the first trade to the second tradeās SL / the first tradeās entry price (should be the same price level obviously).
This is all assuming the market remains as good a set-up condition as when the first trade was opened.
Actually, I like to keep on adding new trades every time the last trade opened makes profit equal to risk, and move all the stops on prior positions to the newest tradeās SL.
There is another option to adding on. You can enter with a number of lots and then take some off as the trade moves in you favour.
I have used a strategy where I enter with 3 lots. Stop loss is placed where the most appropriate place for that stop to be. However the stop loss is for all three lots.
Once a trade has moved 15 to 20 pips I take one lot off to lock in profit. I then would then adjust my stop loss to two lots but I would move one stop loss to break even and leave the other in the original position.
Again I would then let the trade work and once it got to 40 pips take another lot off and adjust my stop loss to 1 lot.
This is just one idea in trade management and there are many more.
Cheers
Blackduck
@Blackducko Thanks for another insight