Pyramid trading, also known as pyramiding, is a trading strategy which consists of adding to an existing trade or position as the price moves in the expected direction. Doing so reduces the risk levels of an investment, with traders using small increments to increase their holdings rather than betting big from the start. Pyramid trading should not be confused with either , which are data-based means to determine when a trend is nearing exhaustion, or pyramid schemes, which are unsustainable, fraudulent and often illegal business models.