ES Journal Archive (2011)

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Quote from EON Kid:

Another brilliant post from you bigsnack
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LOL

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Quote from Visaria:

Trade a minimum of 2 contracts. Gives you more flexibility, you can exit one if things are starting to look dicey (when in profit or loss) for example. If you only trade 1 , you don't have this advantage.
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Was thinking about this today V, and while scaling out has its advantages, it also has its disadvantages.

I used to almost always only trade all in all out, only when I started trading ES did I start scaling out, mostly because per contract it's "cheaper" than other instruments and easier to do so.

I know many many people scale out, but I am considering going back to AIAO, or when my cajones get a bit bigger and more mature, scaling IN.

Scaling out assumes the most risk up front, and reduces risk but also profit potential as the trade goes in your favor. A 2 contract trade with a 2 point stop must go in your favor 4 points with a scale out of 1/2 at that point just to get a reward equal to the initial risk. Scaling in, on the other hand, assumes a low initial risk, and as the trade goes in your favor assumes more risk.

It's just never resonated with me that I assume a large risk up front, and as the trade goes in my FAVOR, that I progressively carry a smaller and smaller position. I know that scaling out gives flexibility in terms of guaranteeing profit along the way, and that it makes us feel good to bank a profit early in a trade, but logically, doesn't it make more sense to want to increase a position as a trade goes our way, and decrease a position as it goes against us? I think so, but am always open to hearing different points of view in this neverending debate on risk management :)
 
Just nailed Friday's VPOC to the tick -- 46.50 (this happens a lot), but looks like it needs to go lower, no real buying pressure (volume) just yet.

EDIT: 46.75 is also the weekly pivot, so some confluence at this area.
 
Hs anybody else thought about Israel nuking Iran and the market impact? First reaction is obviously cash, but maybe even the dollar would take a hike! Obviously a bomb in Ian is different than one in NY harbor, but I think stree this souls understand we're in a time where a nuke is far more likely than it ever was in the cold war, Israel or not...
 
Quote from JoshDance:

Was thinking about this today V, and while scaling out has its advantages, it also has its disadvantages.

I used to almost always only trade all in all out, only when I started trading ES did I start scaling out, mostly because per contract it's "cheaper" than other instruments and easier to do so.

I know many many people scale out, but I am considering going back to AIAO, or when my cajones get a bit bigger and more mature, scaling IN.

Scaling out assumes the most risk up front, and reduces risk but also profit potential as the trade goes in your favor. A 2 contract trade with a 2 point stop must go in your favor 4 points with a scale out of 1/2 at that point just to get a reward equal to the initial risk. Scaling in, on the other hand, assumes a low initial risk, and as the trade goes in your favor assumes more risk.

It's just never resonated with me that I assume a large risk up front, and as the trade goes in my FAVOR, that I progressively carry a smaller and smaller position. I know that scaling out gives flexibility in terms of guaranteeing profit along the way, and that it makes us feel good to bank a profit early in a trade, but logically, doesn't it make more sense to want to increase a position as a trade goes our way, and decrease a position as it goes against us? I think so, but am always open to hearing different points of view in this neverending debate on risk management :)
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TBH, this scaling in/out, shake it all about is something i'm only considering now. There appear to be tradeoffs with everything we do. Nevertheless the FLEXIBILITY to exit partially a position, whether or not you choose to do so, has merit.
 
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