That is a great result RickM and you appropriately match the needs of your risk management according to your trading methodology.
But just on the topic of risk in general, I will get a touch geeky.
If we think about risk in a holistic sense we are paid to take risk and manage it so if we think of a directional trade what are the risk points.
Taking a position in the market our initial risk is intuitively high as we are close to our stop loss level and the market has not had a chance to move in our direction.
The next phase of a successful trade is that it reaches a level of profit that trailing stops lock in enabling additional positions that have accrued profits to protect from a loss.
But as time increases the risk of an adverse directional movement increases or unexpected events or announcements may adversely impact our price movement. The old adage the trend is your friend until the bend at the end.
This risk profile of high then lower then higher follows interesting the pressure profile across a stenosis within a tube or vessel.
Graphical represented as follows
The pressure curve can be equated to our risk profile in the genesis of a trade so in theory building a position of contracts using a 1 3 1 fusiform methodology rather than a pyramid approach may in fact better match the risk profile of the progression of a normal trade.
Just some of my thoughts to consider I am not sure I have seen this presented anywhere else by anyone so buyer beware.
Regards RM
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