Quote from Buy1Sell2:
If a trader is showing better gains by taking partial profits, it is most likely a function of inability to define trend and reaction highs/lows that is causing the trader to feel they do better just getting in and getting out...
Your statement above is completely
false.
At least your now stating that's its possible for a trader to show better gains via taking partial profits when profit targets are reached. 
Guess what, its also substainable for
some traders!!!!!
However, as I stated before, most traders that do scale out also don't scale out of some trades for the following reasons:
* Initial stop/loss protection is hit that takes them completely out of the trade (no scale out)
* Profitable trailing stop is hit that takes them completely out of the trade (no scale out).
* They get a trade signal for the opposite direction that requires them to close the position or reverse the position (no scale out).
* They realized their entry was flawed and there's no support for the trade (no scale out).
* Market conditions dramatically change for the worst against their position (no scale out).
The above are realities in which you had prior said isn't really part of this discussion.
My point is that for some odd reason you
continue making the assumption that traders that do use scaling out as part of an exit strategy are doing it 100% of the time.
This is another
false assumption and I've listed some very common reasons when scaling out isn't appropriate or will not occur.
Further, as I pointed out before in this thread that you also quickly said wasn't part of this discussion...
Traders that exit all their contracts/shares at the same time when the trade reaches its profit target (reaches maturity) will rarely make adjustments to stay in the trade even if market conditions support such an adaption.
For example, if you have a 10 point target on your Long position and something extremely bullish happens when the position reaches 7 points in the profit...
Those (a majority) that always exit their entire position will do so when 10 points is reach.
No adapting.
That's reality and not theory.
However, those that scale out in the above example will exit
partial at 10 point profit and try to catch more profits on their remainders because they tend to exploit new market information...allowing them to adapt the position while its still open.
Simply, they've adapted their trade because they've recognized the price movement has become stronger and not as you said because they have the inablility to define a trend.
That's reality and not theory along with old ET journals to support the above statement I've made.
With all that said above and as I stated before a few times in this thread...
Your theory is good but isn't reality of what's actually occuring for traders that scale out.
Therefore, in theory, scaling out is inferior to an exit strategy that involves exiting the entire position at once.
Heck, just a few weeks ago I was trading with someone that always exit all at once and we both had a 10 tick target on a ER2 trade but I stayed in the trade after it reached 10 ticks because of a sudden change in supply/demand (more demand).
My first 1/3 got the 10 ticks while my remainders got almost 3x more.
What was the other guy doing?
He got his 10 ticks and was very happy but he didn't get a re-entry signal into the stronger price movement and sat there watching as the bigger profit train left the station.
Continuing, just like a majority of the traders that do scale out...there are times when it merits I exit all at once when the profit target reaches its goal.
Once again, most traders that do scale out will also use the
exit all at once strategy when market conditions merits for such.
In comparison, those that tends to walk along your path...
Rarely will they exploit supply/demand when it changes in their favor via staying in the position beyond their initial profit target.
It's just obvious that you can't understand that sometimes market conditions change
after entry that gives traders an opportunity to stay in the position
beyond its maturity.
Don't misunderstand...both types of traders can be
very profitable.
I've just seen some traders that were more profitable when they scaled out of some trades that merit such in comparison to when they use to always exit all the contracts/shares at the same time when the profit target is hit.
Theory is good discussion and if your stats show that your actual trading is more profitable via the
exit all at the same in comparison had you been scaling out after profit targets have been reached...
More power to you and I won't argue with anyone via saying its not substainable.
Just the same, I'm one of those traders that's more profitable when I scale out in comparison to not scaling out because I do both depending upon the market conditions.
So far (knock on wood) after over a decade of trading...its substainable.
P.S. The long winded message above is saying to use two exit strategies instead of one because market conditions will always change.
Mark
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