"Scaling out" is inferior behavior

[Buy1Sell2]

Quote from volente_00:

One could also make the case for inferior behavior with wide trailing stops and waiting to exit the trade only after an obvious reversal.

Trailing stops within the noise serve well to take you out of profitable trades. This is why I use much much less leverage when I trade.

 

[Buy1Sell2]

Quote from whitster:

how is that relevant to whether or not it is scaling out?

methodology and positive expectancy are irrelevant here.

the point is that THIS IS HOW MY SETUPS ARE DESIGNED.

i am not getting into a semantical wank here.

so, let's define terms.

is that hedging, if i scale out - evne if the scaling is PREDETERMINED BY THE SETUP PRIOR TO TRADE ENTRY.

When you take some positions off prior to the final target without obvious reversal signals, you are scaling out.

 

[Lamont_C]

Quote from Buy1Sell2:

I have been trading real money for 26 years. My backtesting is real time trading.

Right.

 

[volente_00]

So in theory you are entering these trades without a specific target in mind and riding them until a obvious reversal happens ?

 

[Buy1Sell2]

Quote from volente_00:

So in theory you are entering these trades without a specific target in mind and riding them until a obvious reversal happens ?

I have a general target in mind where I begin looking at reversal potential more in earnest, but I ride until A) the trailing stop gets taken out B) I see obvious reversal. For example, I look at 1000 pips on weekly Euro FX charts as a general guideline, but will ride it farther if I can.

 

[illiquid]

You can guess that for alot of b1s2's trades, he gets shaken out by "obvious reversals" and gets left behind as the market continues fowards. I'm guessing his success doesn't depend upon correctly identifying reversals so much as getting lucky enough that a market has caught enough people off guard, facing the wrong way, that no "obvious reversals" will occur until a distant price point later. That's pretty much how technically-oriented trendfollowers make their money.

 

[Buy1Sell2]

Quote from illiquid:

You can guess that for alot of b1s2's trades, he gets shaken out by "obvious reversals" and gets left behind as the market continues fowards. I'm guessing his success doesn't depend upon correctly identifying reversals so much as getting lucky enough that a market has caught enough people off guard, facing the wrong way, that no "obvious reversals" will occur until a distant price point later. That's pretty much how technically-oriented trendfollowers make their money.

Remember, I defer to the recent reaction high/low first. I rarely get shaken out of any trade due to this and the under use of leverage.

 

[illiquid]

Quote from Buy1Sell2:

For example, I look at 1000 pips on weekly Euro FX charts as a general guideline, but will ride it farther if I can.

I hope you intraday traders realize who you're getting advice from -- it's like a pit trader taking notes from Warren Buffett.

 

[billp]

B1S2,

When you say get out after an 'obvious reversal', is your reversal usually at the top ( eg: if you are long futures), rather than at the bottom/valley? That means you are usually out way before your trailing stop loss level. Thks

Volente,
Great questions. Many of the questions such as 'definition of obvious reversal' was what I wanted to ask. Thanks and keep up those questions.

Quote from volente_00:

One could also make the case for inferior behavior with wide trailing stops and waiting to exit the trade only after an obvious reversal.

 

[Buy1Sell2]

Quote from billp:

B1S2,

When you say get out after an 'obvious reversal', is your reversal usually at the top ( eg: if you are long futures), rather than at the bottom/valley? That means you are usually out way before your trailing stop loss level. Thks

Yes, that is right. I am out and have reversed well prior to the stop being taken out. It is a rare occasion using daily and weekly charts that I would be stopped out. Most of the time, I am out on my own accord. This includes the version of daytrading that I employ using low leverage and no "probes". When I was using the probe strategy, the losses were very small with a lot of stop outs and then I would ride the winning trade. Both methods are acceptable and both should be let run to maturity. Thanks for asking!