"Scaling out" is inferior behavior

[JimmyJam]

It occurs to me that without a good simulation run across various markets looking at strict criteria for:

a) holding a trade or;
b) scaling-out

We will not be able to quantitatively see the truth or falseness of the statement. While very good arguements can be made for either case, you actually must at least run a backtest using fixed criteria to see what happens.

Does anyone have access to software that can do this?

I don't.

Regards,

Jimmy

 

[ForrestGump]

Quote from Buy1Sell2:

............... I have not had a losing option trade since the 1992 Soybean market..................................

LOL, have you put on a trade since then? (just kidding)


I would like to point out here that what B1S2 is advocating is the time-tested 'classical' method of trading commodity futures on longer timeframes. The very famous "Turtle" trading rules - developed by the legendary Richard Dennis - use precisely this strategy. Entries are always scaled-in while exits are NEVER scaled-out.

Like B1S2, I too have been trading for a very long time and find this strategy to be excellent on longer timeframes. I have also been day-trading index futures for nearly ten years now. In that intra-day timeframe, it is not very difficult to out-perform this type of strategy.

Happy trading folks

 

[OddTrader]

Quote from JimmyJam:

Disagree with the man's philosophy, sure.

But don't insult his trading, I've seen him make real-time calls in multiple instruements across all of the major asset classes:

Financial Indicies
Curriencies
Agriculture , etc.

I'm sure he trades quite a few more than what I've listed, those are just the categories in which I've lurked and seen him make the calls. Whatever he is doing, it works for anything that leaves an OHLC.

Can I say the same? Can you? In fact, how many on here can, for that matter?(um, that falls under the category of rhetorical).

No, he defiitely isn't snak oil.

Regards,

Jimmy

Looks like you must know how to sell snail oil very well.

 

[illiquid]

Quote from volente_00:

Trading is like playing poker, you have to raise the stakes when the oddsare in your favor, watch on tv, they do not bet the same amount over and over and end up winning.

This thread is basically limit poker vs no-limit poker thinking -- I hope people can guess which is which.

 

[Buy1Sell2]

Quote from volente_00:

Trading is like playing poker, you have to raise the stakes when the oddsare in your favor, watch on tv, they do not bet the same amount over and over and end up winning.

yes and they don't scale out on 4th street

 

[OddTrader]

Quote from Buy1Sell2:

No my trades are not all hedged with options until I feel we are nearing a top. As a market climbs I begin scaling in call option sales well out of the money. When the market is near the top, I will be fully hedged. I have not had a losing option trade since the 1992 Soybean market. As far as the scaling in goes, the move seldom(and I mean very seldom) takes off without me. If it does, I go full bore at that time. Very few times that this happens.

Snail oil again!

How do you know this top is "The" final top, without another top coming soon?

You think I believe you have never had a losing trade ever in your trading life. Do you believe this?

I'm signing off now. Bye!

PS: If you're so sure about the final top you say for "Fully Hedged", you really don't need any options or hedging in your trading at all.

 

[Optionpro007]

Could you elaborate on your second point pls? Like for example, which method do you then think is best suited for intraday trading, etc...?

Thanks !

Quote from ForrestGump:

LOL, have you put on a trade since then? (just kidding)


I would like to point out here that what B1S2 is advocating is the time-tested 'classical' method of trading commodity futures on longer timeframes. The very famous "Turtle" trading rules - developed by the legendary Richard Dennis - use precisely this strategy. Entries are always scaled-in while exits are NEVER scaled-out.

Like B1S2, I too have been trading for a very long time and find this strategy to be excellent on longer timeframes. I have also been day-trading index futures for nearly ten years now. In that intra-day timeframe, it is not very difficult to out-perform this type of strategy.

Happy trading folks

 

[illiquid]

Quote from JimmyJam:

We will not be able to quantitatively see the truth or falseness of the statement. While very good arguements can be made for either case, you actually must at least run a backtest using fixed criteria to see what happens.

http://www.elitetrader.com/vb/showthread.php?s=&postid=1238772

We've already discussed the fact that scaling can outperform any backtested "optimal" exit, especially given rapidly changing market conditions. A backtest will always reveal an "optimal" exit that is by definition better than scaling out -- but in real time this doesn't play out.

 

[JimmyJam]

Quote from OddTrader:

Looks like you must know how to sell snail oil very well.

...

Keeping in line with my earlier post, here are some onf the categories you would have to look at:

Holding Periods
Intra-day
Daily
Weekly

Markets
Financials
Curriencies
Agriculture
Interest Rate
Metals

Position Sizing

Instruements
Stocks
Options
Futures
* whatever is tradeable and I've left out.

Returns
Weekly
Monthly
Yearly

Best Regards,

Jimmy

 

[JimmyJam]

Quote from illiquid:

http://www.elitetrader.com/vb/showthread.php?s=&postid=1238772

We've already discussed the fact that scaling can outperform any backtested "optimal" exit, especially given rapidly changing market conditions. A backtest will always reveal an "optimal" exit that is by definition better than scaling out -- but in real time this doesn't play out.

You've had a discussion amongst the proponents of one methodology of trading.

This in no way even remotely resembles a test using a scientific methodology such as I am proposing, with stringent critiera for both methodologies (doesn't have to be proprietary) and across as many broad markets and using multiclasses of financial instruements.

Regards,

JJ