"Scaling out" is inferior behavior

[billp]

Thanks. I highly suspect that you were out near the highs instead of waiting for your stop loss to be taken out. If even half of your stop loss were to be taken out, then this method will not be good as one has given up a reasonably large portion of the profits back (regadless of whatever time frame it is)

Quote from Buy1Sell2:

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!

 

[thenewguy]

B1S2, you are skewing the probabilities in your favor to make your point. As you say, "it's simple math, and the numbers don't lie". I posted this before and you either didn't see it, or didn't respond to it. Using different probabilities makes scaling out much more profitable than not.

TNG

 

[Buy1Sell2]

Quote from thenewguy:

B1S2, you are skewing the probabilities in your favor to make your point. As you say, "it's simple math, and the numbers don't lie". I posted this before and you either didn't see it, or didn't respond to it. Using different probabilities makes scaling out much more profitable than not.

TNG

I saw it, but the format wasn't good. Probablilities come into play when designing what you think the target should be optimally. Once you have done that, then scaling out is the wrong thing to do. I agree that probablities are important, however they are a step that is taken before the trade occurs. Once the trade occurs, you must allow the trade to run full to the optimal target.

 

[whitster]

the idea that there is *one* "optimal target" for all modalities, time frames, instruments traded, methodologies, etc. is where your logical fallacy is.

but again, you are either astoundingly ignorant, or a troll

 

[Buy1Sell2]

Optimal targets are different for every time frame and set up. Once a trader has determined the optimal target for their own particular set up and time frame, then the trade must be allowed to reach maturity with the full position on, not part of it.

 

[thenewguy]

Quote from Buy1Sell2:

I saw it, but the format wasn't good. Probablilities come into play when designing what you think the target should be optimally. Once you have done that, then scaling out is the wrong thing to do. I agree that probablities are important, however they are a step that is taken before the trade occurs. Once the trade occurs, you must allow the trade to run full to the optimal target.

The math in that example is undeniable. It proves that scaling out is (much!) more profitable at times than not scaling out. The only determining factor is your % chance of hitting each target.

TNG

 

[Buy1Sell2]

Directly from the Turtles Trading rules

 

[Buy1Sell2]

Also directly from the Turtles Trading Rules:

 

[stormins]

Quote from Buy1Sell2:

Optimal targets are different for every time frame and set up. Once a trader has determined the optimal target for their own particular set up and time frame, then the trade must be allowed to reach maturity with the full position on, not part of it.

And what If it doesnt reach your target and you close your position when you have to along with everybody else heading for the exit costing you $$ (since you are still full boat)?? Oh wait I guess you are just the seer that KNOWS exactly where the top/bottom of that move is, "maturity" as you so aptly called it ???
How arrogant can one be to think they can "determine the optimal target" and expect the market to cooperate every time?? No trader worth his salt can honestly say that they hit the top or bottom tick every time. As a matter of practicality you either sell too early ...or too late. Scaling allows you to do both.

 

[HolyGrail]

Quote from stormins:

And what If it doesnt reach your target and you close your position when you have to along with everybody else heading for the exit costing you $$ (since you are still full boat)?? Oh wait I guess you are just the seer that KNOWS exactly where the top/bottom of that move is, "maturity" as you so aptly called it ???
How arrogant can one be to think they can "determine the optimal target" and expect the market to cooperate every time?? No trader worth his salt can honestly say that they hit the top or bottom tick every time. As a matter of practicality you either sell too early ...or too late. Scaling allows you to do both.

I agree with you 100%, but he will come back with that you have faulty optimal targets if you can't depend on the stock getting to the target. I scale in and out of almost every stock. It is PART of my strategy. I also have more than one target for every stock. I follow my rules, period. If that is inferior behavior, then well, I love being inferior.