I personally have allowed so many good entries to evaporate due to not taking a profit in time, so I have decided to start scaling out. I do understand that not scaling out theoretically ought to be more profitable, but I am not able to achieve this. So many times trade goes 2 points in profit and turns back to hit entry level and some times beyond that, if I trail it to break even it still makes it a Net loss. Trouble with keeping small stops and letting winners run (without scaling out), is that the amount of losses can easily match final winning trade.
"Scaling out" is inferior behavior
- Thread starter Buy1Sell2
- Start date
I think that Buy1Sell2 and Jack Hershey have a lot in common and much to talk about. Anyone who disagrees with them or trades differently is simply doing it the wrong way. I'd love to see an exchange between the two of them.
As an aside, I note that the people who always scale out are very much in the minority in this poll. Oddly enough, so are the people who make money trading. Coincidence? Perhaps...
As an aside, I note that the people who always scale out are very much in the minority in this poll. Oddly enough, so are the people who make money trading. Coincidence? Perhaps...
But allocating $75k+ per 1 contract and total allocation being less than 10% of total net worth is NOT how most would be able to trade, IMO most rely just on minimum margin requirements. To achieve consistent results without having to scale out daytrading index futures is very difficult, I dare say it's not just psychological, it's about banking profits consistently and not giving it away.
The reason that a daytrader will give away profits is because they typically do not identify the trend correctly and attempt to trade both sides of the market which then causes the stopouts. You will seldom be stopped out if you identify the trend correctly, trade with that trend and then set your stop outside of the noise. This is true whether using a lot of margin or no margin at all.
Daytrading and swing trading require different approaches/methods IMO, intraday trend is a short lived event on many days, one moment you see a trend & 5 minutes later it reverses to take out your stops. Using stops outside the noise according to daily chart's support and resistance levels is not practical for daytrading, again IMO.