Pyramiding

Pyramiding is the position-sizing rule in EP76 穿越1940：我与股票大作手利弗莫尔的最后对话 that adds to a trade only after the existing position is profitable and the trend continues to confirm the thesis. The episode presents it as a disciplined way to increase exposure when the market has already provided favorable evidence.

E153.股神的牌局：复利公式 + 凯利公式 adds a stricter Kelly Criterion interpretation: an add-on is not the same bet repeated for free, because the investor already has correlated exposure. Additional buying should require stronger probability, payoff, or new evidence, and the stop should tighten if the add-on fails.

Key Claims

• Initial position size should be bounded so the first entry can be wrong without damaging the portfolio.
• Later adds should happen only after the market moves in the expected direction.
• Add size should generally shrink rather than grow, creating a pyramid instead of an increasingly fragile late chase.
• Pyramiding uses market confirmation to expand risk exposure; it is therefore the opposite of adding because a losing position is cheaper.
• The method only works alongside Stop-Loss Discipline because the trader needs to cut invalidated positions quickly.
• E153 warns that profitable add-ons can still destroy the trade if they ignore the higher sizing standard implied by Kelly Criterion.

Connections

• Jesse Livermore — source persona teaching the rule.
• Trend Following — environment where pyramiding is supposed to operate.
• Averaging Down — contrasting behavior the episode warns against.
• Investment Risk Management — position-sizing frame behind pyramiding.
• Kelly Criterion and Position Sizing — E153’s reason add-on buying needs higher evidence and stricter exits.