IgazI wrote:I was going over the pros and cons of a 1 + 2 + 1 combination and I think it might actually be usable after all:
The biggest con is that the 2 lot is going to increase the risk by 50% as we would move our stop no closer than the 1/2 ret;
it's still slightly less risk than starting with a 1.5 lot trade.
To double your space, and keep the risk the same, you would need to reduce from 3 to 1 or from 4 to 2.
The obvious advantages are:
1. smaller risk-box on the first add:
if a 12 pip RB becomes 4 then every pip above the ret is a 25% risk reduction.
2. 3/4 ret on the second add:
we want to pull the trigger a 3rd time but we also want to protect our space.
3. 33.3% more risk-space as you move from 4 lots to a 2 + 4 + 2 progression:
2/3 of the 4 lot RB will fund a 4 + 8 + 4 so starting over with 2 lots is a 4/3 RB.
As long as your timing on the first add is not horrible then I think you can get away with it most of the time.
They seem to all have pro/con based on situation. I believe it comes down to your market and what you are trained to execute well.