Quote from Picaso:
Then I guess that's not the reason why you would scale out.
Can't you simply backtest it?
Edit: also, with mean-reverting strategies, adding as the position goes against you should improve the performance, whereas in a trend following system you would add as the position goes in your favor, so likewise, it will depend on your particular strategy - it stands to reason that some strategies will benefit from scaling out, while it will hurt some others. All people I have met that backtested their strategies said that scaling out decreased expectancy. Then again, the same tends to happen with moving stops to BE, but people still do it.
Quote from PushPull:
Obviously, you are incorporating "feel" into your trading. Nothing wrong with that, but that's precisely why I asked the question. Now, in hindsight you can find all sorts of arguments, but the truth is that, at that moment in time, the trade "felt right". That's also obviously a product of your hard earned experience using your "trick".
I'll call you the 2.618-trick-pony from now on! Great trading by the way.
Honestly I can't tell if I just haven't done enough digging, or if it's always going to be "feel" thing. I guess there is probably a great counter argument for nearly every trade out there as well, would you agree?b..,havent tried this but in this thread "they "was using mp in tick and es to time entries..http://www.elitetrader.com/vb/showthread.php?s=&threadid=9727&perpage=6&highlight=mp&pagenumber=1Quote from bigsnack:
I think you are absolutely right. The TICK and the pullback trades are not 100% reliable, and yet some feel better than others. I wish there was a way to quantify that, so I could automate it!!!!
