"Scaling out" is inferior behavior

[kiwi_trader]

Seems this quote is appropriate.

The things people believe in are usually just what they instinctively feel is right; the justifications and arguments are the least important part of the belief.
That's why you can win the argument, prove them wrong, and still they believe what they did in the first place. You've attacked the wrong thing.
So what do you do? Agree to disagree. Or fight. - C. Zakalwe.

Someone is going to have to kill BuySell to have any hope of winning (no, strike that, finishing) the argument.

 

[Buy1Sell2]

Quote from Thunderdog:

I think past trades can provide an indication or an idea, but not a straight answer. Therefore, I'm disinclined to bet entirely on a single number. And make no mistake, it is betting.

History must be paid attention to. It repeats over and over and over....

 

[Buy1Sell2]

Quote from DHOHHI:

Actually one can make the case that there may be many optimal exits ... much depends on the time frame of the trade. A day trade would have a different optimal exit than a position trade where the expected time in the trade is a week for example. And so on ...

Certainly.

 

[Buy1Sell2]

Quote from Lights:

depends on size vs. liquidity. portfolio managers scale in and out cos it's simply too difficult to buy or sell 1 million shares of xyz at once.

Yes you are right. There are numerous portfolio managers here at Elite Trader that I was addressing.

 

[Buy1Sell2]

Quote from illiquid:



Do you believe your scaling type of approach in entering and exiting positions is an essential element in your overall trading success?

"I think it has enabled me to stay with long-term winners much longer than I've seen most traders stay with their positions. I don't have a problem letting my profits run, which many traders do. You have to be able to let your profits run. I don't think you can consistently be a winning trader if you're banking on being right more than 50% of the time. You have to figure out how to make money being right only 20 to 30 percent of the time."

Huh? He makes a great argument for NOT scaling out right after he said he scales out. He is not letting profits run. I believe he has too large of a position on and gets frightened. Why else would he get out of some and choke the trade off? Remind me not to read anything by or about him in the future--- Absolutely Ridiculous!

 

[illiquid]

Quote from Buy1Sell2:

No. I am in the latter camp and don't scale out. I let the market tell me when to get out, although I have a general idea of how far a market should run when I enter the trade. As the trade gets more long in the tooth, I pay more and more attention to market action for reversal.

Well, more power to you -- I ain't here to tell you what's right for you, I trust you are a doing your best for optimizing your particular strengths/weaknesses. All you had to do was add the words "for me" at the end of the thread title, and I think this would have lasted about 3 pages. But then again, it wouldn't have gotten me to think through the issue to the point where I'm thoroughly convinced of the answer. Yep, I think I'm gonna go with Lipschutz on this one, nothing personal.

 

[Buy1Sell2]

Quote from illiquid:

But then again, it wouldn't have gotten me to think through the issue to the point where I'm thoroughly convinced of the answer. Yep, I think I'm gonna go with Lipschutz on this one, nothing personal.

He is wrong.

 

[illiquid]

Quote from Buy1Sell2:

Huh? He makes a great argument for NOT scaling out right after he said he scales out. He is not letting profits run. I believe he has too large of a position on and gets frightened. Why else would he get out of some and choke the trade off? Remind me not to read anything by or about him in the future--- Absolutely Ridiculous!

You don't get it, he is already letting his profits run, and likely holding the position far longer than you ever would. That much is a given.

 

[Buy1Sell2]

Quote from illiquid:

You don't get it, he is already letting his profits run, and likely holding the position far longer than you ever would. That much is a given.

I do get it. He is not letting al his profits run. He is a fundamental trader and so should scale in as I do even though I am technical trader. However, I would very much doubt that he holds winning positions longer than I do.

 

[illiquid]

Quote from Buy1Sell2:

He is wrong.

Sorry if I take his word over yours, I think he's probably got a bit more experience on this sort of thing than you. Just my guess, who knows.