"Scaling out" is inferior behavior
- Thread starter Buy1Sell2
- Start date
This thread is similar to the chicken and the egg dilemma 
You're still missing the point. Trader A reaches the profit target @ 680 and decides it's time to exit. Regardless, lets pretend trader A in theory will ignore his/her profit target when 680 is reached and decides to stay in the trade and then when 690 is reached...determines then that its time to exit...
Trader B would do the same.
Therefore, this is one of those price action situations I mention when its time to exit all the position for trader A and trader B assuming they both determine that the price action is no longer favorable.
In contrast, there will be times when trader A decides to exit all and trader B decides to only scale out. My point is that your think in error that trader A will see the same trade opportunity as trader B when both reach the same profit. You forget that they think differently...trader A is thinking to exit the entire position while trader B is looking for additional opportunity when the profit target is reached for both at the same price.
My point is that in theory a trader A may IGNORE his/her profit target when that profit target is reached and decides to stay in the trade for bigger profits. Yet, in reality, most trader A types exit their entire position when profit target is reached and then start threads at ET complaining about leaving profits on the table (there's been countless threads here at ET about leaving profits on the table).
However, the trader B types aren't limited like the trader A types. Trader B, in reality, usually has experience or has learned to look for additional profit opportunities when the primary profit target is reached. Thus, trader B types usually has several profit targets in comparison to the trader A types that usually has only one profit target.
The key to successful scaling out is to recognize when not to scale out, trail the stops at the primary target to ensure the worst case scenario results as a trader A profit and to have several profit targets prior to entry or discover a new profit target after entry when the opportunity arises. Thus, scaling out every single time or without an understanding of the price action as it is developing in real-time in real-trading conditions will result in less profits in comparison to trader A.
Currently, I'm averaging 1.2 points more on my trader B (scaling out) trades in comparison to my trader A (all out) trades in normal volatility conditions. In contrast, I'm averaging 2.6 points more on my trader B trades in comparison to my trader A trades in high volatility conditions. As for low volatility market conditions...trader B and trader A are very close with That's stats for about 8 years of trading whereas prior to that my trader B (scaling out) underperformed my trader A (all out) for many years until I learned when to not to scale out (e.g. never scale out of a losing trade, never scale out of a trade at profit when the price action is no longer favorable when the primary profit target has been reached and a few other price action situations I won't mention due to your inability to think outside the box).
I'm done here because the thread has become an echo (same info discussed again and again) especially considering you seem determine to prevent it from becoming inactive...you may as well show up and just type bump.
think outside the box
Mark
What you are trying to put forth is a discussion of which system's exits/entries are better. That is not what is being put forth here. What is being said is that when a person has developed a system of exits and entries, then all in all out benefits THAT system. It's not comparing two traders to each other. For example--your trader B would be better off by letting the entire trade run to 690, not by scaling. Your trader A was better on their system by taking all off instead of scaling some at 675. This is why I said trader A makes 12,000 by removing all at 690---because I was trying to help you understand that trader B would make more by leaving it all on to 690 rather than scaling. You folks keep trying to compare traders against each other. It's not that---that's a different discussion. --This is a discussion on how to juice the returns, or reduce losses, on an existing system.
scaling out is inferior was the title,your original post does not mention system ,system implies automated,if you are not watching it,then all in/out may be best,unless it does not reach your target and reverses and takes out your stop...you seem to be defending your statement with a few variables,omitting a mass of others..your style ,which is one of millions,may work best with that law,but not in all trading styles,or systems,the large houses for example that pick off day traders with small reverse moves within a trend intraday,only scale out and back in on partials as evident by volume and remove the bulk of their position in the last 45 minutes of the day,at several prices,which is a partial of their larger positionQuote from Buy1Sell2:
What you are trying to put forth is a discussion of which system's exits/entries are better. That is not what is being put forth here. What is being said is that when a person has developed a system of exits and entries, then all in all out benefits THAT system. It's not comparing two traders to each other. For example--your trader B would be better off by letting the entire trade run to 690, not by scaling. Your trader A was better on their system by taking all off instead of scaling some at 675. This is why I said trader A makes 12,000 by removing all at 690---because I was trying to help you understand that trader B would make more by leaving it all on to 690 rather than scaling. You folks keep trying to compare traders against each other. It's not that---that's a different discussion. --This is a discussion on how to juice the returns, or reduce losses, on an existing system.