The ladder method in plain English

The idea

A ladder is a planned series of entries in one direction. You open the first position when price reaches a chosen zone. If price keeps moving against you by a set distance, you add the next rung, and so on. Instead of judging each trade on its own, the whole group is treated as one basket.

How the lots grow

In the reference method the first two rungs are 0.20 lots each, the next two are 0.40, then 0.60, and so on, adding 0.20 every two rungs. Later rungs are bigger, so a smaller move back in your favour can bring the whole basket to break-even and then to a profit.

• Rungs 1-2: 0.20 lots each
• Rungs 3-4: 0.40 lots each
• Rungs 5-6: 0.60 lots each
• The first two trades do not need to be profitable on their own

One target for the basket

The basket closes when its weighted-average entry plus a small net target is reached. The weighted average is each entry price multiplied by its lots, added up, and divided by the total lots. Because later rungs are larger, the average sits closer to the newer, deeper prices.

What can go wrong

The method has no built-in stop. If price keeps trending against the basket, losses grow with every rung, margin use climbs, and your broker can stop you out. That is why PipLadder caps the number of rungs from your portfolio and leverage, stress-tests the plan, and pauses new rungs around high-impact news. Treat the ladder as a plan you must be able to afford, not as a guarantee.