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Should I Pyramid My Day-Trading Positions?

Pyramiding can be very profitable or can be the tomb of ruin. All too often traders add larger and larger numbers of contracts to their original position, thereby raising their average cost. When the market makes a small move against them, their profit is gone. A heavily pyramided position can turn from being profitable to being a big loser very quickly. Whether a pyramid will work for you or against you depends on how you build it. The tendency is to begin with one contract, then add 3 more, 5 more, 10 more, and so on. The result is a top-heavy pyramid that can come crashing down. To profit using a pyramid you must be a good builder. Take your largest position at the beginning, then add successively smaller units as the market continues to move in your favor. You might begin with five contracts, then add three, then two, then one.

Can I Enter a Market with One System and Exit with Another?

Some traders like to combine systems. I do not consider this good practice. A system is a system because its performance is based on a set of rules generated specifically for the conditions and markets that were tested. To combine one system with another, picking and choosing entries and exits based on each system, is not recommended. If you trade a system, then trade that system to the exclusion of all else.

Do I Have to Trade Every Day?

No. Fortunately, the markets provide many opportunities during each week. You do not need to trade every day if, for instance, you trade on the same weekday or weekdays. Some systems and indicators seem to have a day-of-week effect. S&P futures, for example, tend to close higher on Mondays. Buy signals on Mondays in S&P tend, therefore, to be more accurate. By trading on the same day or days of the week you will be able to take advantage of such day-of-week effects where they exist.

Should I Pyramid My Day-Trading Positions?

Pyramiding can be very profitable or can be the tomb of ruin. All too often traders add larger and larger numbers of contracts to their original position, thereby raising their average cost. When the market makes a small move against them, their profit is gone. A heavily pyramided position can turn from being profitable to being a big loser very quickly. Whether a pyramid will work for you or against you depends on how you build it. The tendency is to begin with one contract, then add 3 more, 5 more, 10 more, and so on. The result is a top-heavy pyramid that can come crashing down. To profit using a pyramid you must be a good builder. Take your largest position at the beginning, then add successively smaller units as the market continues to move in your favor. You might begin with five contracts, then add three, then two, then one.

Should I Attempt to Get Flash Fills on All of My Trades?

A flash fill is a price fill that occurs within seconds of the trader plac ing an order. Once the order is placed, it is called down to the trad ing floor when it is signaled to the pit broker by hand. The pit bro ker reports back the fill by hand signal, and the client is notified The whole process can take from as little as 1 minute to as long as ', minutes. It is a highly efficient and very prompt way of gettinj market orders executed. Where such fills are possible, use them.