"Scaling out" is inferior behavior

Do you scale out of positions?

  • I always scale out

    Votes: 113 14.1%

  • I scale out most of the time

    Votes: 228 28.5%

  • Most of the time, I do not scale out

    Votes: 189 23.6%

  • I never scale out

    Votes: 270 33.8%
  • Total voters
    800
FanOfFridays said:
To any beginners reading these posts from the OP, please understand that his statements are based on the mistaken assumption that one can determine the optimal exit point for a trade at the time the trade is placed.
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This assertion was never made. I said that I can know as a top is being made etc. (paraphrasing of course)
 
Buy1Sell2 said:
Higher win rate is not a prerequisite to trading highly successfully.
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Nobody said it was a prerequisite, but it can certainly have some advantages (such as a much smoother equity-curve and easier position-sizing).
 
ktm said:
I've traded spreads for many years and also scale out, but in a different way.

I may start with a fairly wide spread, or overlapping spreads - let's say on ES and we open a 2000/2040/2080 butterfly. The first part of a butterfly (2000/2040) might be worth $28 when I put it on. I will enter an order to move the 2000 to 2005 when I can get 4.50 for it...or sometimes 4.00 depending on a number of other factors. The upper half might be worth $-17 or so. I'll do the same there but in 10 point increments, taking the 2080 down to 2070 for $1. This continually compresses the spread and reduces risk while increasing profit potential.

Of course everything is capped because it's a spread. The theory here for me is to take profit when I get 80% to 90% of the max and remove potential losses when I can cover them for 10% to 20% of the max.

Three things that are crucial to this.

1) Your may need to add spreads as necessary when the market doesn't cooperate and this is just an example to make a point about scaling

2) If you do this, you need a broker with low commissions

3) Whether it's 80%, 90% whatever, you should find the number that makes you comfortable and pair it with spreads that also fit your personality in terms of risk etc...

Scaling out may be "inferior behavior" with some products and some strategies, but it's the key to profitability for what I do.
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Just saw this post and I think that it's a pretty good one. Just curious if you ever start with the long vertical and then add the short vertical as it moves in your favor
 
W.J. Feathermaker III said:
Just saw this post and I think that it's a pretty good one. Just curious if you ever start with the long vertical and then add the short vertical as it moves in your favor
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I do different spreads based on lots of factors. The key for me is not to keep anything short that's very cheap and anywhere near the money, nor anything long that's worth nearly full value that may turn and run against me.
 
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