"Scaling out" is inferior behavior

[fearless9]

Quote from volente_00:

Your example is flawed because you use 100 + point stops and try to capture 200 + moves. You will get hundreds of 9 point moves over the same time period that only 1 200 point move happens.

You are being realistic V in a self serving thread, the intent of which is to be pedantic and intractable.

regards
f9

 

[Buy1Sell2]

Quote from volente_00:

Your example is flawed because you use 100 + point stops and try to capture 200 + moves. You will get hundreds of 9 point moves over the same time period that only 1 200 point move happens.

This is an attempt to change the discussion to whether or not to position trade or day trade. It's not relevant. Just remove a couple of zeroes on the 100 and 200 and you get 1 and 2.

 

[volente_00]

Quote from romik:

That is exactly why B1S2 is right in his statement.

You just provided 90% win rate not just of scaled out trades, but of trades that went to 9 point gain, now please recalculate same 2nd example of 90% without scaling out

Scaling out offers you a higher % win rate which in return over time nets higher returns. I'll take 80 % scaling out over 30 % not scaling out any day of the week.



10 trades


8 winners for 4.5 points
2 losers for 3 points




3 winners for 9 points "FULL POSITION"
7 losers for 3 points




Who is more profitable ?

 

[Buy1Sell2]

Quote from smilingsynic:

There is a difference between insulting someone and setting forth a proposition.

Note that B1S2 did not say that a person was inferior, but that the approach that a person may use was inferior.

If someone could point out in this thread where B1S2's math was flawed, or his assumptions unwarranted, I would be appreciative; but I understand if no one would for lack of time.

Thanks SS, Very appreciative of your efforts.

 

[volente_00]

Quote from romik:

Ishmael, today people like Volente could have quite possibly banked numerous primary target wins, they would never agree with your statement. They are slaves to the whole concept of being there and raking in win after win, no matter how big or small the gain is, it's like a tournament to them, been there & done that.

EDIT: Illiquid, I saw your reply, nobody is talking about illiquid markets, apart from you and some other posters using that as some sort of justification of their need to scale out.

Not to sound arrogant, but if you can trade ES well, then what B1 made on 1 swing trade can be made in just one volatile day under the current marker conditions. To a capable day trader, every day under these current conditions offers the opportunity to capture 10 to 30 point minimum. To each his own.

 

[volente_00]

Quote from Buy1Sell2:

No. If I would have decided to get out at the point you are mentioning, I would have exited the full position and not scaled out and that would have reaped a larger reward than your suggestion of scaling. You're missing the crux of the discussion.

so you would have scaled out half for 228 points and let yourself get stop out on the other half for the same 140, You would have made $4400 extra per contract on the half you scaled out and overall the trade would have been more profitable.

 

[Buy1Sell2]

Quote from GTS:


Lets say you want to sell your mega-holdings when the price hits 100, but you can't dump it all at once because you are worried about slippage. So you you sell your shares into the market in blocks, you don't dump it all at once.

What does that have to do with the core issue of selling everything at a certain price (100) vs. selling half at 100 and holding on to the remaining until you hit a different price target (say 102)?

Those are two totally different concepts. Scaling out to avoid slippage isnt scaling out - its just basic order management.

I was hopeful that someone would point this out instead of me. Thank you GTS!!
This is exactly right. Using limit orders to get out to try and avoid slippage is not scaling. I still don't recommend trading markets or such size that market orders are not viable. This is playing with fire in my view, but is another subject really. After all. if you are using a stop loss order which most say they do, then you are using a market order. Anyone that feels that they need to use a stop limit order is trading too large or is trading an illiquid market.

 

[volente_00]

B1, do you not agree that if you have 2 exact traders and one person scales out and the other does not, then the one who scales will have a much higher % win rate with lower points per trade won than the non scaler who will have a much lower % win rate with higher points per trade one ?

 

[Buy1Sell2]

Quote from volente_00:

Scaling out offers you a higher % win rate which in return over time nets higher returns. I'll take 80 % scaling out over 30 % not scaling out any day of the week.



10 trades


8 winners for 4.5 points
2 losers for 3 points




3 winners for 9 points "FULL POSITION"
7 losers for 3 points




Who is more profitable ?

The example you have outlined here is of two different non scaling approaches. Neither example showed any scaling, so it was an exercise to find the optimal target with full position only.

 

[Buy1Sell2]

Quote from volente_00:

Not to sound arrogant, but if you can trade ES well, then what B1 made on 1 swing trade can be made in just one volatile day under the current marker conditions. To a capable day trader, every day under these current conditions offers the opportunity to capture 10 to 30 point minimum. To each his own.

This is not relevant to the discussion. You are trying to change this to a debate about swing/position versus day trading. I have already indicated that the math works on any time frame.