Pyramiding

Pyramiding is a speculating strategy where, after establishing a futures position, an speculator increases the size of his initial open profitable position by adding more contracts in declining increments if prices of the underlying commodity continue increasing. For example, let’s say a speculator opens a position by buying three futures contracts of a specific commodity. If the price of the underlying commodity is on the rise, the speculator could add two more contracts. If the favorable price upward trend persists, the speculator could add one more contract.