Compound position is actually compound position, compound position trading is to point to the trader will make a single unit into trading position and with momentum inch two parts.
In this way, THE momentum part of the market can plan for long-term advantages, while for the other part of the position traders can set a distant stop loss order, leaving enough room for the market to consolidate or adjust.
Over the long term, these positions are the most profitable.
However, IT IS IMPORTANT FOR A TRADER TO COMPOUND A POSITION, SO THAT IF THE TREND then RESUMES, THE TRADER WILL BE ABLE TO COVER THE CLOSED POSITION.
The purpose of compound position trading is to lock in profits.
It is best to avoid starting a trade with only one contract or one unit position.
By trading multiple units of the position, the trader has more flexibility, which may improve the overall performance of the trade.
Set aside a specific portion of your portfolio to engage in short-term trades that frequently move in and out of the market.
If THE market HAS REACHED ITS FIRST target and is CLOSE TO a holding ZONE, AND THE SWING INDEX INDICATES AN overBOUGHT CONDITION, THE TRADER CAN EITHER PARTIALLY CLOSE OUT THE POSITION OR PLACE a CLOSER stop-LOSS ORDER.
The aim is to lock in or secure profits.
If the trend then resumes, the trader covers the closed position.
Therefore, it is advisable for traders to avoid taking only one contract or one unit position when they start trading.
By trading multiple units of the position, the trader has more flexibility, which may improve the overall performance of the trade.
