"Scaling out" is inferior behavior

[trackstar]

Quote from Buy1Sell2:

No---Better bet is to ride the full amount to the target.

I'm glad you have identified what works for you but being so ignorant of other styles of trading is unlike most profitable traders.

 

[5Pillars]

Quote from J-Trade:

Well said, vhehn.

The best trader I know - a very successful man - scales both in and out.

In backtesting mechanical trading systems with a suitable parameter set , I have noted that scaling out almost always reduces total net profit, whilst also smoothing the equity curve, increasing the winning percentage and reducing the drawdowns. Many would find these worthwhile trade-offs, as do I.

J.

This is correct - for many of these reasons I scale in and out for most of the systems I trade. I have found that dynamic entries/exits are much more scalable than static ones - another reason I use the approach that I do. Works for me but is not the only way.

 

[Reaver]

Quote from Buy1Sell2:

False.

Sorry, if this is any of you, but it is the truth.

No offense taken. Opinions vary.

Please just don't tell my trading account that it really hasn't been making returns lately. It doesn't know any better, so don't ruin it. Thanks.

 

[Reaver]

Quote from Buy1Sell2:

Choking off profits by scaling in or scaling out is a scaredy cat strat designed to stroke the "trader's" emotional outlook/ego.

Also remember that this is a psychological game we play here. Whatever helps build confidence is very important as well.

 

[trackstar]

Quote from Reaver:

Also remember that this is a psychological game we play here. Whatever helps build confidence is very important as well.

NO WAY MAN, THERE IS ONLY ONE WAY TO TRADE. FLOOR TRADERS ARE WRONG, HEDGE FUNDS HAND OUT MONEY, AND ANYONE THAT SCALES OUT IS STUPID.

ALSO THAT IS THE SUM OF MY ARGUMENT......

 

[allenhobbs]

OP, forgive me if you answered this, but what instruments are you trading?

 

[taowave]

Quote from Reaver:

Also remember that this is a psychological game we play here. Whatever helps build confidence is very important as well.

Very true Reaver....

Its also important to trade in a style that suits your particular style....

As for the scale vs not to scale debate,it is a very simple task to backtest.I have not found one particualr method to have a significant advantage over the other.This includes all forms of stops..

I do find great entertainmaent value when traders claim there is only one method of optimally trading.

 

[illiquid]

Quote from Buy1Sell2:

False.

There may be many different profitable signals , triggers etc., but there is only one proper way to trade. That is: Cut losers short and ride winners to either the target or the trailing stop with full position on. Choking off profits by scaling in or scaling out is a scaredy cat strat designed to stroke the "trader's" emotional outlook/ego. Sorry, if this is any of you, but it is the truth.

Have you ever tried to sell 3000 shares of BIDU exactly at the "top"? Or at any single price or moment in time, for that matter?

The real "truth" is that adaptability is the ONLY secret to successful over the long haul (meaning multiple decades). Scaling out becomes a necessity every successful trader eventually needs to deal with, because let's face it, if you really know what you're doing, I mean REALLY know, you will get big, and get big fast, relatively speaking.

Specifically, when it comes to intraday equities trading, scaling in/out is more than just a strategic option -- it's almost intrinsic to the profitable trader's mindset. Those who understand how the tape functions know exactly what I'm talking about. Those who have failed miserably in this regard and automatically claim one single way to trade "properly" -- well, their 'conclusions' are unsurprising and speak for themselves.

 

[NihabaAshi]

Quote from illiquid:

Have you ever tried to sell 3000 shares of BIDU exactly at the "top"? Or at any single price or moment in time, for that matter?

The real "truth" is that adaptability is the ONLY secret to successful over the long haul (meaning multiple decades). Scaling out becomes a necessity every successful trader eventually needs to deal with, because let's face it, if you really know what you're doing, I mean REALLY know, you will get big, and get big fast, relatively speaking.

Specifically, when it comes to intraday equities trading, scaling in/out is more than just a strategic option -- it's almost intrinsic to the profitable trader's mindset. Those who understand how the tape functions know exactly what I'm talking about. Those who have failed miserably in this regard and automatically claim one single way to trade "properly" -- well, their 'conclusions' are unsurprising and speak for themselves.

Agree.

By the way, the thread starter twice told me in this thread he wasn't interested in real trading situations...

One such occasion he requested I start a thread elsewhere on such a topic involving real trade conditions where scaling out is more important.

That told me he was talking more about theory than what actually happens.

By the way, your example is just one out of many where scaling out is a necessity and/or more efficient.

However, depending upon the trade situation...all in and all out is a necessity and/or more efficient.

Simply, it really depends upon the trading instrument, price action, trade situation et cetera that determines when one is more superior than the other (scale vs all).

Mark

 

[illiquid]

Quote from NihabaAshi:

By the way, the thread starter twice told me in this thread he wasn't interested in real trading situations...

One such occasion he requested I start a thread elsewhere on such a topic involving real trade conditions where scaling out is more important.

Mark

Ok, no point wasting my breath further here then -- not like it wasn't obvious but I'm a sucker like everyone else.