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Definition of 'Pyramiding'
A method of increasing a position size by using unrealized profits from successful trades to increase margin.
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Investopedia explains 'Pyramiding'
An investor who is pyramiding uses excess margin from the increasing price of a security in his or her portfolio to purchase more of the same security. This is generally a slow method of increasing one's position size as the margin increases will permit successively smaller purchases.
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This strategy involves scaling into profitable investments as they continue to rise.
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It is impossible to avoid them completely, but there is a systematic method you can use to control them.
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