That fits within the fusiform scaling theory, it does appear...

  1. RM
    6,448 Posts.
    That fits within the fusiform scaling theory, it does appear coarse in that the second position equates to 60% of your total projected trade size.

    In effect 20% at the beginning with risk higher, 60% in the belly or sweet spot and final 20% tapered as risk increases giving a 60/40 distribution.

    You would match that with your trading history and methodology entering your next allotment of contracts when the trade has moved sufficiently in your favour to cover a significant portion of any immediate reversal.

    Contrasted with say a .03 .01 .01 pyramid (spire) type trade it would be 80% at the higher risk start and later stage of a directional trade and only 20% in the mid stage sweet spot of a successful trade. 

    Regards RM
 
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