The following is a quick opening range short scalp trade on crude oil futures contract.
The above 30 seconds execution chart showing entries ( Dark Blue arrows) & taking profits-covering short position (scaling outs in Green arrows) while approaching VWAP target, before we got the initial bounce off ETH- VWAP.
Once $69.51 swing low was taken out, sellers took control to further confirm the move.
Notice how I am pyramiding (averaging up) and adding size on weakness when market in moving in my favour, while reducing risk & stop size accordingly.
Managing risk with size is an advanced technique used by traders to increase reward to risk ratios (R Multiple) which is counter intuitive to most traders.
As you are averaging up (selling at lower prices in that case) your probability of success is increasing (while you average price is decreasing) as your are going with the momentum and order flow while watching order flow on micro time frames for real-time confirmation.
When it comes to overall trading performance, this style of risk management & position sizing increases your odd of success and overall average win/Loss ratio over time.
The following 5 minutes chart setup showing VAH & 200 SMA acting as resistance zone (after 5 waves up move) while POC acceptance confirming the initial trigger down move.
There is no one style that fits all in trading. This style risk of position sizing and risk management technique is not for everyone, each trader is likely to develop his/her own style of trading that fits their own personal comfort level, based on their experience, instrument they trade and their risk appetite.
Hope you find this article useful.
Best
Gus
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