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								<div class="elementor-element elementor-element-25e6fc35 elementor-widget elementor-widget-text-editor" data-id="25e6fc35" data-element_type="widget" data-widget_type="text-editor.default">
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			<style>/*! elementor - v3.11.0 - 13-02-2023 */
.elementor-widget-text-editor.elementor-drop-cap-view-stacked .elementor-drop-cap{background-color:#818a91;color:#fff}.elementor-widget-text-editor.elementor-drop-cap-view-framed .elementor-drop-cap{color:#818a91;border:3px solid;background-color:transparent}.elementor-widget-text-editor:not(.elementor-drop-cap-view-default) .elementor-drop-cap{margin-top:8px}.elementor-widget-text-editor:not(.elementor-drop-cap-view-default) .elementor-drop-cap-letter{width:1em;height:1em}.elementor-widget-text-editor .elementor-drop-cap{float:left;text-align:center;line-height:1;font-size:50px}.elementor-widget-text-editor .elementor-drop-cap-letter{display:inline-block}</style>				<p>This pyramid trading tutorial will show you how some of the most successful traders turn a single winning trade into an incredible result by strategically adding to their positions at key levels.</p>
<p> </p>
<p>Imagine starting with one position, watching it move in your favor, and then strategically stacking more positions on top, each riding the wave of momentum.</p>
<p> </p>
<p>This is exactly how some of the greatest traders in history have supercharged their gains, and how <a href="https://www.tradingcup.com/learn/interview-stage-2-champion-zhen-wang-about-his-strategie">Zhen Wang</a> in the Trading Cup’s Stage 2 managed to generate an impressive return trading gold by pyramiding into his winning positions six times.</p>
<p> </p>
<p><img loading="lazy" decoding="async" class="aligncenter size-full wp-image-756" src="http://wp.tradingcup.com/wp-content/uploads/2022/10/zhen-wang-pyramid-gold-trades-trading-cup-900.jpg" alt="pyramid into winning positions on gold vs us dolllar" width="900" height="526" srcset="https://wp.tradingcup.com/wp-content/uploads/2022/10/zhen-wang-pyramid-gold-trades-trading-cup-900.jpg 900w, https://wp.tradingcup.com/wp-content/uploads/2022/10/zhen-wang-pyramid-gold-trades-trading-cup-900-300x175.jpg 300w, https://wp.tradingcup.com/wp-content/uploads/2022/10/zhen-wang-pyramid-gold-trades-trading-cup-900-768x449.jpg 768w" sizes="auto, (max-width: 900px) 100vw, 900px" /></p>
<p> </p>
<p>In this blog, we&#8217;ll break down pyramiding in trading—how it works, why it’s a sensible, high-reward strategy, and how successful traders use it to maximise returns in the <a href="https://acy.com/en/market/xauusd/">gold</a> and <a href="https://acy.com/en/products/forex/">forex markets</a>.</p>
<p> </p>
<p>But that’s not all. For those interested in <a href="https://www.tradingcup.com/">copy trading</a>, this approach presents a unique opportunity: top-performing traders who master pyramiding can provide high-impact trading signals for followers to copy, potentially amplifying returns for both the trader and their copiers.</p>
<p> </p>
<p>Let’s dive in.</p>
<h2>What is Pyramiding in Gold and Forex Trading?</h2>
<p>Pyramiding is the act of adding to a winning position as the market continues to move in your favor. Rather than going all-in at once, traders scale into their trades, taking advantage of strong trends while <a href="https://acy.com/en/market-news/education/risk-management-trading-forex-guide-144305/">managing risk</a>.</p>
<p> </p>
<p>In the gold market, where volatility and momentum play a huge role, pyramiding can allow traders to capitalise on strong bullish or bearish trends by stacking positions strategically.</p>
<p> </p>
<p>A well-timed entry followed by additional positions at key breakout points can exponentially increase profits. And when combined with the <a href="https://acy.com/en/market-news/education/trailing-stop-loss-strategy-144647/">best trailing stop loss strategies</a>, you can really transform your trading results.</p>
<p> </p>
<p>In forex trading, pyramiding works similarly, with traders adding positions as currency pairs move in their favor, often using technical indicators like support and resistance levels, <a href="https://acy.com/zh/market-news/trading-education/Fibonacci-trend-trading-education-175749">Fibonacci retracements</a>, and <a href="https://acy.com/en/market-news/education/how-to-use-trendlines-trend-channels/">trend confirmations</a> to decide when to add.</p>
<p> </p>
<p>However, forex traders must be cautious of <a href="https://acy.com/en/market-news/education/forex-leverage-explained-margin/">leverage and margin</a> requirements, as additional positions increase exposure.</p>
<h2>Why Do Top Traders Use Pyramiding?</h2>
<p>Some of the most legendary traders have used pyramiding to scale up their winnings, including:</p>
<ul>
<li><strong>Jesse Livermore</strong>, the famous stock trader who built fortunes by aggressively adding to his best trades.</li>
<li><strong>Larry Williams</strong>, who achieved a record-breaking 11,000% return in a<a href="https://www.worldcupchampionships.com/"> futures trading competition</a> using aggressive position sizing techniques.</li>
<li><strong>Nicolas Darvas</strong>, who made $2 million in 1957 trading stocks using a version of pyramiding.</li>
<li><strong>Zhen Wang</strong>, who dominated Stage 2 of the Trading Cup by pyramiding into gold trades six times, turning a single trade into a powerhouse winner.</li>
</ul>
<h2>Pyramiding in Copy Trading – A High-Stakes Strategy for Signal Providers</h2>
<p>For traders who provide signals in copy trading, pyramiding presents both a massive opportunity and a risk factor for followers.</p>
<p> </p>
<p>A skilled signal provider who executes pyramiding correctly can generate exceptional returns for their copiers, but this strategy requires precise timing, risk management, and discipline to avoid overexposure.</p>
<h2>Successful copy traders who use pyramiding often:</h2>
<ul>
<li>Identify strong, trending markets (such as gold during a breakout).</li>
<li>Use strict entry rules to avoid adding too early.</li>
<li>Scale positions only when the market confirms momentum.</li>
<li>Set clear exit strategies to protect profits.</li>
</ul>
<p><img loading="lazy" decoding="async" class="aligncenter size-large wp-image-5936" src="http://wp.tradingcup.com/wp-content/uploads/2025/03/euraud-trend-chart-pyramiding-technique-strategy-v2-1024x610.jpg" alt="euraud trend following chart for pyramiding trading strategies" width="1024" height="610" srcset="https://wp.tradingcup.com/wp-content/uploads/2025/03/euraud-trend-chart-pyramiding-technique-strategy-v2-1024x610.jpg 1024w, https://wp.tradingcup.com/wp-content/uploads/2025/03/euraud-trend-chart-pyramiding-technique-strategy-v2-300x179.jpg 300w, https://wp.tradingcup.com/wp-content/uploads/2025/03/euraud-trend-chart-pyramiding-technique-strategy-v2-768x457.jpg 768w, https://wp.tradingcup.com/wp-content/uploads/2025/03/euraud-trend-chart-pyramiding-technique-strategy-v2-1536x915.jpg 1536w, https://wp.tradingcup.com/wp-content/uploads/2025/03/euraud-trend-chart-pyramiding-technique-strategy-v2-2048x1219.jpg 2048w" sizes="auto, (max-width: 1024px) 100vw, 1024px" /></p>
<p>When done right, pyramiding in copy trading can turn modest returns into exponential gains, but traders must ensure their followers understand the risks involved.</p>
<p> </p>
<p><strong>Click play on the video below</strong> to learn more about pyramiding, plus the pros and cons of this strategy.</p>
<p> </p>
<p><iframe loading="lazy" title="YouTube video player" src="https://www.youtube.com/embed/6VIYOWUItg8?si=gF3M0BfAuyusz5cp" width="560" height="315" frameborder="0" allowfullscreen="allowfullscreen"></iframe></p>
<h3>In this video tutorial on pyramiding, we run through:</h3>
<ul>
<li>What is pyramiding in trading?</li>
<li>Why pyramiding has been <strong>so powerful</strong> for many traders</li>
<li>What are <strong>R multiples</strong>?</li>
<li>How to look at <strong>winning trades in terms of R multiples</strong></li>
<li>How the <strong>Turtle Traders</strong> used it with incredible results</li>
<li>A strategy on <strong>how to use pyramiding</strong></li>
<li>Which strategies are <strong>best suited to pyramiding</strong></li>
<li>What strategies <strong>should not use pyramiding</strong></li>
<li>The <strong>best books</strong> to read to understand this principle in more detail</li>
</ul>
<h2>Avoiding the Pitfalls: When Pyramiding Is a Bad Idea in Gold and Forex Trading</h2>
<p>Pyramiding is a powerful tool when used correctly, but it’s not a strategy that suits every trader or market condition.</p>
<p> </p>
<p>The key to making pyramiding work is understanding your <a href="https://acy.com/en/market-news/education/position-sizing-pyramiding-calculating-your-risk-reward-ratio/">risk-to-reward ratio</a> and ensuring it aligns with high-probability trend-following strategies.</p>
<p> </p>
<p>If your trades are structured around small profit targets relative to your risk, pyramiding can quickly become inefficient, or even counterproductive.</p>
<h2>Why Pyramiding Doesn’t Make Sense with a Low Reward-to-Risk Ratio</h2>
<p>At its core, pyramiding relies on letting winners run and stacking positions only when the trade continues to perform strongly.</p>
<p> </p>
<p>This approach makes little sense for traders who typically target small profits, such as short-term forex scalpers or traders with an average reward-to-risk ratio of 1:1 or 1:1.5.</p>
<p> </p>
<p><img loading="lazy" decoding="async" class="aligncenter size-large wp-image-5917" src="http://wp.tradingcup.com/wp-content/uploads/2025/03/risk-reward-forex-trading-best-risk-reward-ratios-3-1024x613.jpeg" alt="risk reward ratios when trading gold forex pyramiding" width="1024" height="613" srcset="https://wp.tradingcup.com/wp-content/uploads/2025/03/risk-reward-forex-trading-best-risk-reward-ratios-3-1024x613.jpeg 1024w, https://wp.tradingcup.com/wp-content/uploads/2025/03/risk-reward-forex-trading-best-risk-reward-ratios-3-300x180.jpeg 300w, https://wp.tradingcup.com/wp-content/uploads/2025/03/risk-reward-forex-trading-best-risk-reward-ratios-3-768x460.jpeg 768w, https://wp.tradingcup.com/wp-content/uploads/2025/03/risk-reward-forex-trading-best-risk-reward-ratios-3.jpeg 1172w" sizes="auto, (max-width: 1024px) 100vw, 1024px" /></p>
<p> </p>
<p>Here’s why:</p>
<p> </p>
<p>If you typically exit trades quickly, you don’t have enough room to scale into the position before reaching your profit target.</p>
<p> </p>
<p>By the time you add positions, you may already be at or near your <a href="https://acy.com/en/market-news/platform/how-to-take-partial-profit-mt5-mt4-145542/">take-profit level</a>, leaving little space for additional gains.</p>
<p> </p>
<p>Your risk per trade increases as you add positions, but if your reward stays small, you expose yourself to greater losses with no significant upside. For example, let’s say you <a href="https://acy.com/en/education/ebook/introduction-to-forex-trading/">trade forex</a> with an average 1:1 reward-to-risk ratio, meaning you risk 50 pips to make 50 pips.</p>
<p> </p>
<p>If you attempt to pyramid into the trade, you may add more positions when you’re already 30-40 pips in profit, meaning the extra positions have almost no room to grow before you need to exit.</p>
<p> </p>
<p>The effort to scale up is wasted because your strategy doesn’t allow enough upside.</p>
<h2>Pyramiding Works Best for Trend Followers with a Minimum 3:1 Reward-to-Risk</h2>
<p>The best traders who use pyramiding successfully are trend followers, looking to identify and ride the strongest market trends. These traders aim for a minimum reward-to-risk ratio of 3:1, meaning they risk 1R to make at least 3R or more.</p>
<p> </p>
<p>This is because pyramiding works best when you:</p>
<ul>
<li><strong>Identify strong market trends</strong> – such as a long, sustained move in gold or a major forex pair.</li>
<li><strong>Let your trades run</strong> – instead of taking small profits quickly.</li>
<li><strong>Stack new positions at key breakouts</strong> – adding exposure only when the trend remains intact.</li>
<li><strong>Know your R multiples</strong> – ensuring that your winners are significantly larger than your losers.</li>
</ul>
<p>For example, if a <a href="https://www.tradingcup.com/learn/gold-trading-strategy-trending-markets-simple-framework">gold trader</a> enters long at $2,000 per ounce with a 3:1 reward-to-risk ratio, they may be targeting a move to $2,150 or higher while risking just $50 per ounce. This leaves plenty of room to pyramid into the trade multiple times as the price trends higher.</p>
<h2>The Bottom Line on Pyramiding when Trading the Global Markets</h2>
<p>Pyramiding isn’t for every trading style. If you focus on small, quick profits, you’re better off using other techniques, as this strategy thrives on big trends and extended price moves.</p>
<p> </p>
<p>Knowing your R multiples is crucial—if you don’t have the ability to let trades run and extract large profits, then pyramiding may introduce unnecessary risk without enough reward.</p>
<p> </p>
<hr class="wp-block-separator has-alpha-channel-opacity" />
<p>For more detailed insights on developing daily trading routines, risk management, and effective position sizing strategies, explore additional articles on Trading Cup. Our trading experts at <a href="https://www.acy.com/">ACY</a> and <a href="https://www.finlogix.com/">FinLogix</a> are also great resources to guide your journey towards trading excellence.</p>
<hr class="wp-block-separator has-alpha-channel-opacity" />
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<h3>Discover Our Best Trading Signals</h3>
<p>At Tradingcup, you can browse through a <a href="https://www.tradingcup.com/signals">selection of signals</a> and review past performance before you decide to copy.</p>
<h3><a href="https://www.tradingcup.com/provide-signal">Become A Signal Provider</a></h3>
<p>Share your expertise and become a signal provider so other traders can copy your trades.</p>
<p> </p>
<p>Stay tuned to our blog for more trader spotlights and leaderboard updates.</p>
<p>Trading involves risks.</p>
<p> </p>
<p>Visit the Tradingcup blog through the link below for more updates: <a href="https://www.tradingcup.com/learn">https://www.tradingcup.com/learn</a></p>						</div>
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