"Scaling out" is inferior behavior

Do you scale out of positions?

  • I always scale out

    Votes: 113 14.1%

  • I scale out most of the time

    Votes: 228 28.5%

  • Most of the time, I do not scale out

    Votes: 189 23.6%

  • I never scale out

    Votes: 270 33.8%
  • Total voters
    800
Quote from Buy1Sell2:

There are professional, profitable traders who scale out. The most successful professional, profitable traders, do not. :)
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Pretty vague assumption on your part considering you do not know every professional profitable trader's pnl.
 
Quote from Buy1Sell2:

This is incorrect. There is a right way to trade and scaling out is not part of that. Anyone feeling the need to scale out, was wildly overextended from the beginning. I guess it could be argued then that scaling out is good because it gets the person back to a position where they won't get whacked. However, it is part of a greater failed system/plan from the beginning. The need for scaling out should never be felt --ever. Equity curves will be smoothed by an overall better entry size. period.
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You are incorrect. Not because of your opinion being wrong, but because of dismissing a view that is different of yours as "wrong".
By definition, knowing that traders have different risk profiles, use different time frames, etc , provides for multiple trade management approaches.

In your premise you're not considering the emotional factor inherent to trading. Time in the market means risk, the longer you hold a position the more risk you're allowing. Unrealized gains are just that, unrealized until you cash in the profits. Locking up some profits on the way out while letting some of your position for further gains mitigates such risk. Again, some people might put more weight in the time issue than others, but that doesn't make one approach right and the other wrong.

An overall better entry sure smoothes the equity curve, but so does scaling out of positions, and so does scaling in to positions. I'm positive a quick, backtest would demonstrate that.

Many, many ways to skin a cat, but it is just plain ignorant to treat as "wrong" a different opinion than that of your own.

BI
 
Quote from Buy1Sell2:

There has never been any mention of "all or nothing" by me. Both "all or nothing" and "scaling out" are inferior strategies.
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I know you're being obtuse for dramatic effect, and please be assured that it's all very entertaining. That aside, exiting a position "all-at-once" is more akin to "all-or-nothing" than is scaling out.
 
Quote from cashmoney69:

trading is not and should not be an "all or nothing" mentality.
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I agree with this. I try to view trading as a game of probability, and adjusting a position is required in order to manage the risk currently in the market. If the risk has increased, it would be prudent to take some back or hedge your position some. Sometimes it makes sense to take back the whole position if the risk is significantly against you. However, I do not believe in scaling out simply because it feels intuitively comfortable. IMO, that is not the right way to trade.
 
Quote from Buy1Sell2:

Scaling out is inferior behavior. When we have a winner, it makes more sense to let it ride. Will that cause us to give back profits sometimes? Yes. However, it will keep you in the really big winners and more than offsets the savings by scaling out.

--The reason folks scale out is many times due to the fact that they took a larger position than they were comfortable with initially. In effect, they were wildly overextended. The scale out feature simply gets them back to where the total position is now of a more correct size for their account size and comfort level. In summary, they were scared when the original position was on and now have been lucky enough to get some profits and feel they can let the rest run. What happens though when the initial trade goes against? --Sometimes they let the whole trade run as losses mount. -No, it's better to size correctly and let it run to where you can exit at a time of your own choosing (borrowed line from George Bush). No sense being a weak hand.
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LOL dude who is this guy? B1S2 must be the greatest trader in the history of markets, I did not know that someone was out there that could absolutely hit the dead nuts high and low of each trade.

Amazing. Write a book dude.
 
Quote from Buy1Sell2:

Scaling out is inferior behavior. When we have a winner, it makes more sense to let it ride. Will that cause us to give back profits sometimes? Yes. However, it will keep you in the really big winners and more than offsets the savings by scaling out.

--The reason folks scale out is many times due to the fact that they took a larger position than they were comfortable with initially. In effect, they were wildly overextended. The scale out feature simply gets them back to where the total position is now of a more correct size for their account size and comfort level. In summary, they were scared when the original position was on and now have been lucky enough to get some profits and feel they can let the rest run. What happens though when the initial trade goes against? --Sometimes they let the whole trade run as losses mount. -No, it's better to size correctly and let it run to where you can exit at a time of your own choosing (borrowed line from George Bush). No sense being a weak hand.
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bro, totally depends on the type of trading you are doing. might make sense if you are trading smaller size or have a retail account where the commish is going to eat a significant amount of your profits. if you are trading size, makes more sense to take profits off as you go along(i.e scale out), putting it back on if/when it retraces, etc. a lot more production/profit in the long run.
 
Quote from volente_00:

Not exactly.


You =Scaredy cat who took 10 contracts from 1550 to 700.

Me = scaredy cat who started with a position that was too large and took their profits at 1300 on 40 contracts.



Or Me=scaredy cat who started with a position that was too large and took 1/4 his profits at 1300 on 40 contracts and the other 1/4s at 1100, 900 and 700.


What's so inferior about making more money in a shorter amount of time ?


:)
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A couple of items here--
One, we now have an admission that a person scaling out is taking a position that is too large. Secondly, you have made my argument for me by showing that had you kept all contracts to 700, you have made the most money. All in--All out--- Not All-or nothing as some have tried to change my philosophy to.-- Ishmael
:)
 
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