Do you scale out of your trades?

[NUTSNEAL]

I am definitely a SCALER!

I will say I have found scaling in to be much more important or valuable to me than scaling out, but I do often scale out too.

 

[ChaosNSX]

I think it depends on your objectives.. If your a scalper, you need to exit it all at once, otherwise your risk reward ratio decreases.. if your a position trader, scaling in makes sense because as you get more confirmation of the trend you want to increase your position. Scalping I feel there should be one target, watch it closesly and bail at weakness. You can always buy back in cheaper. If your ratios not at least 2 to 1 forget it. This is a lesson I am still learning, its tempting to scale out of a scalp, but face it.. your cutting your winners short!!!
:eek:

 

[OddTrader]

Quote from hypostomus:

...scaling in and out is pussy. For any given strategy, there is one and only one optimum entry, stop exit, and profit exit. Any variation from that is suboptimal and makes less money. Bet the whole wad at once, and take it off all at once! (Unless your size gives you poor fills, which is another issue.)

I myself really like Hypo's opinion of maximum profits approach, since this would be particularly good for some strategies invoving such as EOD/ SAR/ etc. decisions.!

 

[vanilla2]

i really like how someone on et recently put it, 'scaling both in and out of positions makes it much easier to be right'.

especially if it relieves any part of the psychological burden, this sounds like the right track to follow. good going man

v

 

[funky]

Quote from hypostomus:

Any variation from that is suboptimal and makes less money.

yes, i agree, but the issue for me is psychological. like thunderdog says, scaling out increases my longevity.

 

[OddTrader]

Quote from hypostomus:

... Any variation from that is suboptimal and makes less money.

This part would be a bit hard to define, due to how much maximum risk (of capital employed) to take and whether to add extra trades while riding a trend could be issues!

 

[kserra]

In my trading I am finding more and more trading with just one contract is very limiting, I find the idea of having 2 or more contracts with an initial profit target on the first one and moving the stop to breakeven on the second contract is very helpful psychologically speaking. When I have just one contract there is only one exit and then you are done, I probably could have pulled another 4 points easy out of the market today if I were trading this method.

 

[hypostomus]

...I should have allowed as how my opinionated opinion relates only to trading the first hour of NQ. I have never developed a system for those conditions where there was more than ONE optimum entry, stop or take. Consequently any other moves are suboptimal. I allocate one fifth of the account to each of the five systems I trade and put on the full allocated amount if and when each system calls a trade.

 

[IndexTrader]

That IS scaling! You just don't characterize/recognize it as such.

I guess that makes you a pussy too.


Practically all decent traders scale in/out because there's no "perfect" entry/exit. Only for the "hypotetical" system optimizers.

Quote from hypostomus:

I allocate one fifth of the account to each of the five systems I trade and put on the full allocated amount if and when each system calls a trade.

 

[hypostomus]

...the value of posting here if you are a complete idiot is that you often get valuable advice free from your betters. Your observation is absolutely correct and much appreciated. What I have been doing IS scaling in. I will correct that by betting the farm on the low volatility trade, and only trading the higher volatility systems if the lower volatility trade doesn't trigger. That assumes that backtesting them conditioned on the low volatility system NOT triggering still shows them to be profitable. Much obliged.