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Could it be that there is no logical necessity nor rationale to expect the future to replicate the past? But isn't every trader projecting some form of the past, -- whether via backtesting, pattern recognition, "gut" feel accumulated over 20 years, etc -- into the future, when he opens a trade...

From Lipschutz's MW interview: "I am definitely a scale-in type of trader. I do the same thing getting out of positions. I don't say, 'Fine, I've made enough money. This is it. I'm out.' Instead, I start to lighten up as I see the fundamentals or price action changing." Do you believe...

I don't think diversification (in general) is the main purpose behind scaling out, at least not for me. I think the argument for and against scaling revolves mainly around what methodology and rationale exists behind the trade and the trader. Some traders have an "ironclad" strategy that they...

Dunno about that one, they say the most vicious short-term spikes occur in bear markets, and vice versa for bull markets. It just might be the opposite that is true. For intraday time-frame, choosing setups with maximum velocity/minimal duration takes precedence over total ticks -- jmo.

I brought up the daytrading to make a point, in that sometimes choices are made for psychological benefit, which in turn leads to overall bottom line benefit. Perhaps, given the variability of relative volatility on an intraday time frame in the markets I trade, scaling allows me to make better...

How does he make more money getting out of everything before the break? If you are out before the break of resistance/support, you are not "more successful" on that trade than someone who exited half before and half on the break. If you often find yourself reversing your position prior to...

There is less and less difference these days between being a successful position trader and daytrader. How hard is it to just keep a position and not touch it? Not much at all. Then why not keep trading the intraday moves as well? That maximizes your profit potential -- "it's a given." In...

I understand his point of view, and it's a natural one coming from a position trader who disdains intraday trading. By definition, he will always be going for the home run, as opposed to daily singles and doubles. But to make a blanket statement that scaling is inferior is a pretty dubious...

8-pips stop in the pound is really kinda asking for it. I've seen 60-pip spikes right before/after a news release which should have pushed it going the other way, with near zero volume in between.

Thunder, you beat me to it. There's always a possibility of a wide gulf between real-time vs theoretically "optimal" and "correct", etc. It's like asking a chartist to look at a chart, and tell you what he (obviously) "would have" done, then trying to replicate the results. But really...

Nice post GTS. I would just add that, although I agree that in general "numbers don't lie", backtests and average amounts are always moving with the next trade, and CAN lie, or at least prove deceptive. The big mistake buy1sell2 makes is that he assumes scaling out will always...

Put is this way, the reason some people scale out is the same reason some position traders don't fiddle with the intraday gyrations and pullbacks -- it's an admission of the inability to do something, namely the inabilty to tell if the next spike is the end of the move, or if the next pullback...

If everyone in the markets exited/flipped their positions at the same time, then yes, it would be very easy to mark when those "bingo" moments are. But it isn't that easy all the time.

My issue arose from the fact that, after betting on "x" to occur and having been proved right with a profitable open trade, I'd find myself basking in being "right" rather than looking to close the trade. In other words, learning to properly identify when "x" had already been discounted by the...

Umm, what time did you buy it this morning?

Oh wow, I remember the first time I watched this movie, just sitting at home on a rainy sunday. I didn't realize how long the thing was, but was just mesmerized.

Woohoo! I'm gonna go max out the rest of my bp right now! :D

These are all relative statements that have no significance without case-by-case detail. But it's funny you wrote the above, because my biggest problem for the longest time was holding my profitable positions too long -- scaling out became my remedy for that.

Bottom line is that it's a personal question that has no blanket answer. The primary rationale I have for entering full size but scaling out is that my entries and exits are almost always non-symmetrical: meaning, I have a higher standard for entering a trade than I do for exiting a winner...

Of course, if you decide to scale out, you will never get the maximum possible profit -- in retrospect holding the max position versus scaling will always be better. But how many times will you exit entirely, and then see the market have another leg up? Or how many times will you decide to...