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How to handle stops after pyramiding

QuestionsCategory: QuestionsHow to handle stops after pyramiding
Florian Staud asked 4 years ago
Hi Pat and Owen I'll want to ask you, how to handle the stops after the second (additional 30%) or third (additional 20%) buy. I understand, after the initial buy we keep our losses extremely small (max. 2.5%) according to several videos I found here. I learnt that a trade, that doesn't move up, is a bad trade. But I'm not sure how to act when it's acting correctly and I do the second and third buy. Where do I set the stops? Do I set several stop orders for each buy or do I use the average position price and set the stop 2.5% below this price? Or do I use a slightly wider stop due to the fact that the stock is acting right? In the past I had often the problem, that more or less exactly when filling the full position the price turned around and I lost around 1% of my trading capital (according to the quite common 1% risk management rule). Thank you for your insight! Best wishes from Germany! Flo   
1 Answers
Avatar photoOwen Staff answered 4 years ago

Hi Florian,
Pat made this video for you:
https://youtu.be/ELX_ZsQyG7g

Florian Staud replied 4 years ago

Hi Pat

Thank you for the video. It answers my question!

P.S. Really like that you have a personal relationship to Germany!

P.S.S. It’s MR Florian 🙂