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Order Flow Pyramiding using Momentum & Trade Exit

DAX 16 July 2018

Pyramiding or adding into a trade once onside is one of the hardest disciplines to learn in trading; the temptation to add onto a trade once onside is great because the market is already saying ‘you are right’ however without observing the right conditions and adding at the optimal time your average price gets shifted closer to where the market is trading and with larger size, a scratch on the whole position becomes more likely.

Choosing when to pyramid requires a technical understanding of where a market is likely to accelerate from and then when the acceleration begins, observation of order flow that suggests the move is continuing. In this example, DAX was breaking, not only the open after an open drive lower, but also multiple highs as well – this should provide a technical acceleration point, once on the move higher, fast buying followed by accumulation identifies areas to add but also establishes a stop on each additional clip thereby managing risk and ensuring profit is maximised on the trade.

In this live Axia daily debrief the order flow that gives the pyramid opportunity is identified, but also how to know when the pattern is changing giving an ideal place to exit the whole trade becomes clear if price action is tracked all the way up the move.

Momentum and breakout exercises are covered in Module 12 of the Axia Price Ladder Course where drills and exercises enable you enhance your Edge in these trade types.

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