Forex glossary
Pyramiding
Pyramiding adds tranches to a position after favorable price movement. It increases total exposure even when stops move and earlier tranches have unrealized gains. Recalculate combined risk from each entry and planned exit; gaps can produce worse results than the scenario.
Illustrative example
How does it work in practice?
In a hypothetical model, you buy 100 units at 10 USD, then 50 at 11 USD. Average entry is about 10.33 USD; closing everything at 10 USD loses 50 USD before fees.
A case to work through
First-tranche gain, addition loss
Model: 100 units at 10 USD, add 100 at 12 USD; common exit 10.50 USD, without costs.
- The first tranche gains 50 USD.
- The second loses 150 USD; total P/L is −100 USD.
What follows? Assess the whole position rather than only the first entry’s protection.
Example boundary: The common exit price is assumed, not guaranteed by a stop.
P/L across all tranches
Text description of the diagram
- First tranche: 100 × (10.50 − 10) = +50 USD.
- Added tranche: 100 × (10.50 − 12) = −150 USD.
- Whole position: +50 − 150 = −100 USD.
A useful distinction
Pyramiding / Anti-Martingale System
Anti-martingale changes risk after outcomes; pyramiding adds tranches while a position remains open.
Check your understanding
Add tranche results at one common exit price.
Show the answer and explanation
0 USD
The +50 USD and −50 USD results offset.
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Related terms
Sources and documentation
- MetaTrader 5: executing trades
Execution modes, requotes, position handling and local trailing on this platform.
Document read: - CME Group: Proper Position Size
The lesson links planned position size to the risk budget, stop distance and the contract's monetary value per price increment.
Document read:
The example illustrates the mechanism. Check current account conditions and instrument specifications with the provider.