Is Pressing The Trade Just Pressing Your Luck?

Almost everyone who has ever traded has scaled down into a trade at least once in his or her career. This very common mistake stems from the need to be proved right. The thinking usually goes like this: if you liked the EUR/USD long at 1.2000, you'll love it even better at 1.1900 - it's a better bargain! Of course, the market eventually teaches all traders the folly of such thinking. There are situations in which markets simply do not turn around, and profits accumulated through years of trading can disappear within days. Follow the scale down strategy long enough, and you will eventually go broke. Scaling down can be a valid strategy, but only when it is practiced with inviolable discipline - which, unfortunately, most traders do not possess. Far rarer than the scaling down strategy, yet potentially far more lucrative, is its exact opposite - scaling up. Among traders, scaling up is also known as "pressing the trade". In this article, we'll explain the strategy of scaling up, show you an example of how it's done and discuss the risks that come with this approach.