"Scaling out" is inferior behavior

[Buy1Sell2]

When you scale out and keep some on, you must have done your homework to determine expectancy. If the expectancy is high enough then it makes sense to leave the entire position on instead of scaling out. If the expectancy is not high enough, then it makes sense to exit the full position at the lower level. Traders must do their homework and determine expectancies at different sizes of moves when their signals occur. You find the size of the move that has the best expectancy without being stopped out and you leave the whole position on. There is no sound argument against this position.

 

[Buy1Sell2]

Quote from volente_00:

Who said they left early ? I took them to the promised destination, half chose to exit, and the other half tipped me extremely well for taking them further into the journey than the original plan.

The driver will be able to be tipped by all passengers at the final destination. By scaling out, the driver is dropping off half of the folks who would be able tip at the end.

 

[JimmyJam]

Quote from Buy1Sell2:

When you scale out and keep some on, you must have done your homework to determine expectancy. If the expectancy is high enough then it makes sense to leave the entire position on instead of scaling out. If the expectancy is not high enough, then it makes sense to exit the full position at the lower level. Traders must do their homework and determine expectancies at different sizes of moves when their signals occur. You find the size of the move that has the best expectancy without being stopped out and you leave the whole position on. There is no sound argument against this position.

OK B1S2, enough already.

You've brought the horse to the water, found it a clear and sparkling pool of sweet mountain fresh sparkling dew, and now you're dipping the bowl into the water, sweetening it with a sprinkling of sugar and holding it up to the horses mouth so that it can drink???#!:eek:

What oh what do you have to prove?

I for one, don't know.

I'm closing my position in this one.

Ciao,

Jimmy Jam

 

[Buy1Sell2]

Quote from whitster:


i scale out.

it works, and i make an excellent income. but it's within my overall methodology.

Thanks for posting and congratulations on a profitable account. You are in the super minority. That said, you would be more profitable by not scaling out. Every trader who is profitable would be. Every unprofitable trader would either become profitable or lose less if they did not scale out. Scaling out is robbing YOU of further profits. Remember, I never said that a trader would not make money or even a handsome income by scaling out. I just said that it's inferior to not scaling out.

 

[risktaker]

Ok. So, since you take the position that scaling out is inferior (and I don't necessarily agree/disagree) what IS your suggested methodology that DOES improve returns considerably? Where, how and when are you suggesting people exit their trades? Hopefully you'll have a solid answer, otherwise this whole thread is just smoke from a newbie with enough time on his hands to make 3500+ posts in a few months. That's probably where you excel.

Quote from Buy1Sell2:

Thanks for posting and congratulations on a profitable account. You are in the super minority. That said, you would be more profitable by not scaling out. Every trader who is profitable would be. Every unprofitable trader would either become profitable or lose less if they did not scale out. Scaling out is robbing YOU of further profits. Remember, I never said that a trader would not make money or even a handsome income by scaling out. I just said that it's inferior to not scaling out.

 

[volente_00]

Quote from Buy1Sell2:

Thanks for posting and congratulations on a profitable account. You are in the super minority. That said, you would be more profitable by not scaling out. Every trader who is profitable would be. Every unprofitable trader would either become profitable or lose less if they did not scale out. Scaling out is robbing YOU of further profits. Remember, I never said that a trader would not make money or even a handsome income by scaling out. I just said that it's inferior to not scaling out.

That is strictly your opinion and you know what they say about opinions. You fail to see the other side of the fence where scaling out allows you to catch some of the profit in situations where holding a full position would results in a full position stop out versus only a half position stop out regardless even if the stop is moved to break even or stays the same. Not sure about you but I a trade in the real world, not in a hypothetical fantasyland where traders know every time exactly where the top and bottom is.

 

[volente_00]

Quote from Buy1Sell2:

The driver will be able to be tipped by all passengers at the final destination. By scaling out, the driver is dropping off half of the folks who would be able tip at the end.

and if the driver gets in a head on collision , only HALF the passengers die so he only gets sued for 20 million instead of 40 million. That's called risk management. Having a set priced target is inferior behavior if you ask me.

None of us truly know what the market's gift to us will be on any single trade. We have expecatations but sometimes it gives more, sometimes it gives less. By having a fixed price target and exiting completely at that level your are screwing yourself out of extra profits that could be captured with a scale out strategy

 

[volente_00]

B1S2, why did you scale into your short from 1260-1325 ?

 

[whitster]

"Thanks for posting and congratulations on a profitable account. You are in the super minority. That said, you would be more profitable by not scaling out. Every trader who is profitable would be. Every unprofitable trader would either become profitable or lose less if they did not scale out. Scaling out is robbing YOU of further profits. Remember, I never said that a trader would not make money or even a handsome income by scaling out. I just said that it's inferior to not scaling out."

first of all, i would not be more profitable by not scaling out. these predetermined scale locations are not arbitrary. they are based on the backtesting OF the setups I am using.

i have tested these setups. i know what would happen in various trades if I DIDN'T scale out, since I log each trade in excel, including the adverse move agaisnt me (if any) in each trade, how far the action moved AFTER i scaled out (if at all), etc.

and even IF i would be more profitable (which i wouldn't be with MY setups), profitability is not the only factor. there is also drawdown, percentage winning trades, etc.

i prefer my methodology for, among other reasons, i have the VAST majority of my days end up to be net winners (which means on a daily basis i suffer little to no drawdown), and my equity curve is smooth.

i trade to generate income, not to make a "big killing" on any one trade.

your attitude is typical of the know-it-all ego trader. since you don't know MY setups, you have no way of knowing (mathematically) whether I would make more money by not scaling out. i do know, since i know the expectancies and the price action that typically happens in these setups.

my targets are DIFFERENT for different setups because they have difference expectancies, and different probabilities of turnaround, etc.

what you are doing is applying a very narrow ideology to a very broad area, and one you know nothing about - the setups i am using.

i do know, from my excel data, as well as backtesting, that even moving my first target (i have 3 targets on some setups, 1 target on some , etc. it depends on the setup) out ONE TICK significantly changed my profit factor.

over the course of hundreds of trades, i fine tuned my exit targets to offer the best balance of profit potential, minimization of drawdown, etc.

my point is it works for me, for MY setups.

and anybody who is so ignorant that they claim they know that scaling out would offer GREATER profits without even knowing what the setups ARE is clearly operating from a position of ignorance or arrogance.

and to repeat. i am talking futures scalps. these are not swing trades, nor investments. i have some investments i have held for 10 yrs. those , i do not scale out. it depends on the instrument, the setup, and the desired goal of the trader, the position sizing, etc. etc. etc.

you have an incredibly ignorant mindset if u believe you know what would work better for me, without even knowing what the setups are, and why the targets are as they are.

but again, i suspect you are yet another ego trader. the kind that professional traders take money from. thanks for playing. we need you.

 

[FanOfFridays]

Quote from whitster:
i trade to generate income, not to make a "big killing" on any one trade.

Exactly the point I was trying to make earlier in the thread. The OP didn't seem to be able to catch on. I scale out for many of the same reasons you do.

Quote from whitster:
your attitude is typical of the know-it-all ego trader. since you don't know MY setups, you have no way of knowing (mathematically) whether I would make more money by not scaling out.

and one you know nothing about - the setups i am using.

my point is it works for me, for MY setups.

and anybody who is so ignorant that they claim they know that scaling out would offer GREATER profits without even knowing what the setups ARE is clearly operating from a position of ignorance or arrogance.

Bingo. Amazing that someone would even try to defend the position that he knows best what tactics are going to work for strategies that he isn't employing and doesn't know anything about. That is, unless the OP is claiming that he knows every trading strategy ever devised by anyone.