"Scaling out" is inferior behavior

[whitster]

lol

you are quoting the turtles trading rules to support your point???!!

which is exactly my point. optimal trading (and scaling vs. nonscaling ) VARIES depending on timeframe, trading methodology, etc.

the turtles trading methodology is a TREND following system

trend following systems RELY on (usually) having a lower # of winning vs. losing trades, however, a much higher amount won in winning trades vs. lost on losing trades.

in THAT type of methodology, not scaling can make sense

duh

again, you are extrapolating a narrow rule set for ONE methodology to all methodologies

but i already realized this long before you quoted turtle trading

if i am (as i do for a living) scalping dow futures (some of my trades last less than 10 seconds), that is a completely different methodology and obviously the turtle trading rules don't apply

you get more ridiculous as this thread goes on

 

[Astrologer]

Well i personally think scaling in or out is much better but hey no one knows where the market is going
Let say i am trading 3 contract and i get 3 point on the es i would scale out 2 car for a 3 point profit and the last i would put a stop loss to brake even point
I mean scaling out is not bad it all depend on the situation and how you have your setup
( no one , no charts , no TA , np price volume , no analytics can say where the market is heading so while we are up we might cash in.
People who dont scale out are willing to take the pain in and out and if they are right and hold the position to the desired price will be rewarded well , but like some one said u can always use the capital to get in another position
I love scaling out

 

[romik]

I think most do not realise that B1S2 enters early on most occasions, before there is a possible trend. That is also reflected in his intraday methods, I've observed him buying ES when it is down like 15 points, when I would assume the vast majority of retail is reacting to price and are selling. Most would join the trend at some stage, but due to oscillation are forced physiologically to lock in partial profits and leave the rest on in the hope that price will continue its course. Assuming there are no kids here I do not see why people get so wired about a comment which is true, it's like saying a BMW 5 is not a luxury car when compared to a Bentley, true, but will probably upset a proud owner of the 5 series. I am also a partial scale outer, I do understand though that it is not a perfect method.

 

[Buy1Sell2]

Quote from whitster:

.

the turtles trading methodology is a TREND following system

trend following systems RELY on (usually) having a lower # of winning vs. losing trades, however, a much higher amount won in winning trades vs. lost on losing trades.

in THAT type of methodology, not scaling can make sense

Exactly. My point is that if you are a profit target guy, then you should be able to find the target that hits the most whether it is 1 tick or 30 ticks or 400 pips etc. No one knows exactly the top but one can find the area of the top or bottom fairly well. Once you have defined your profit target then you let the whole position run until you reach that target, and not before. As for me, I do not use profit targets, rather I leave the whole position on while I use trailing stops and I reap very large amounts per trade versus the profit target guy ---very much like the Turtles. That being said, the same rule should apply in either type trading--the whole position should be left on to the maturity of the trade.

 

[Buy1Sell2]

Quote from romik:

I think most do not realise that B1S2 enters early on most occasions, before there is a possible trend. That is also reflected in his intraday methods, I've observed him buying ES when it is down like 15 points, when I would assume the vast majority of retail is reacting to price and are selling. Most would join the trend at some stage, but due to oscillation are forced physiologically to lock in partial profits and leave the rest on in the hope that price will continue its course. Assuming there are no kids here I do not see why people get so wired about a comment which is true, it's like saying a BMW 5 is not a luxury car when compared to a Bentley, true, but will probably upset a proud owner of the 5 series. I am also a partial scale outer, I do understand though that it is not a perfect method.

Thank you for the support there Romy. I believe there is quite a bit of belief in my assertion out there as well, but the folks on my side of the equation don't post.--The total of people in the poll who either never scale out or don't scale out very often is in excess of 50 percent.

 

[FuturesTrader71]

Wow... I just came across this thread. I give it to B1S2 for having the courage to provide his reasoning.

I, however, cannot imagine ever knowing enough to figure out the "optimal target." That is a stretch and is pretty subjective since "optimal" can be 10% for one or 1000% for another. In my mind, there are probabilities, averages and standard deviations to all the numbers in the market. However, it makes no sense to not scale out and then leave runners. This is true for any instrument. You can guess but you cannot know.

In my trading, I put on a full boat and scale out as the market gives me clues to further movement in my favor. I then leave a portion on for a runner because I really don't know where it will turn and in what timeframe. At that point, my trade has paid me and if it continues to pay, then so be it. I do this with my intraday trading in futures as well as with my stock fund. This is especially true in such a strong bull market where many trade have hit the "not so likely" 3rd StDev target.

I hope that makes sense. I think the only "inferior behavior" in trading is not pulling the trigger when the setup occurs and not pulling it again when the setup has failed. Everything else is semantics.

 

[Buy1Sell2]

There is no reason to cut your position down and have runners unless you believe that the market will reverse. And at that time there should be no runners either! That, by the by, is also one of the major determinants of where stops should be placed. Do not concern yourself with trying to breakeven or have a profit on every trade. Instead, focus should be placed on limiting losses and letting winners run fully. In the end, traders using these types of strategies will be the victors.

 

[whitster]

the point , which has been endlessly discusssed is that NOBODY knows when the market will reverse, or how long it will run

i trade the dow futures for a living and i scale out

whether or not dood thinks it is "inferior behavior", i know the positive expectancy of my trades, and the smoothness of my equity curve

i know the average amount of adverse travel my setups make against me, which is why i know where to set a logical stop, but scaling out (and moving stops in) works great with my methodology.

it is NOT the only way. it is A way, and given particualr setups and market conditions it is far from inferior

 

[Buy1Sell2]

My posts do not suggest that I know the exact tick of the top or bottom (I do suggest that the area can be seen). Rather, the point here of the thread is that whatever your system is to define maturity of the trade, it is better long term to not scale out. Yes, money can be made scaling out and you can be successful, but it is inferior to a system that has you removing all positions at the same time. Please pay more attention to the subject at hand. Thank you.

 

[volente_00]

B1S2, I have seen you many times on your trades let 4,5,6 points of more on es slip away and sometimes even turn into losses. Had you just sold half on those and moved the stop to break even you would have made more money period. You are trying to hit homeruns and sometimes do but what good is a 20 or 30 point gain when you had 5 6 points losses before you got it ?