"Scaling out" is inferior behavior

[FanOfFridays]

Quote from Buy1Sell2:

Here is a post from 2007 where I describe the purpose of my demonstration of failed daytrading.

(From 2007)
It's best to trade from only one side.

Can you give me a link to this 2007 post?

Thanks

 

[volente_00]

Quote from Buy1Sell2:

and on the trades that went farther in my direction, I made much more money. That money more than offsets the money missed on the trades that you would have encouraged scaling. The point has already been proven by myself and others. We are now discussing the number of decisions a trader has to make when scaling and also the concept of reverse position sizing. --Ishmael

Ever since you started posting trades in your journal, I have only seen 3 or 4 trades where you got out close to a top or bottom, compared to at least 20 trades that you would have gained much more on. On one of those trades along, you gave up 140+ es points in profit. Unless you can catch near the top or bottom everytime, which in your journal, you have proven that you can't. You will be more profitable from scaling out in the long run.

 

[Optionpro007]

Quote from volente_00:

EUnless you can catch near the top or bottom everytime, which in your journal, you have proven that you can't.

When applying a trend following strategy correctly, one is not looking to catch tops or bottoms.

The frame of mind a long term position trader uses as compared to a short term day trader is like night and day.

 

[OddTrader]

http://www.elitetrader.com/vb/showthread.php?s=&postid=2456161#post2456161

Quote from OddTrader:

If you don't mind, I would vote for one of our great ET traders mentioned her:

http://www.elitetrader.com/vb/showthread.php?s=&postid=2455367#post2455367

" Quote from Buy1Sell2: Daytrading is an inferior strategy

Quote from Buy1Sell2:Trading from both sides [i.e. trading both long and short] is a losing strategy

Quote from Buy1Sell2:I am able to determine the extent of future market moves by backtesting

Quote from Buy1Sell2:A method that is used by the majority of traders here and fund managers all over the planet is 'sub-optimal' because I said it is "

 

[BostonTrader339]

given this thread is now 215 pages long, perhaps the best way to resolve if this smileyfaceguy is right or nuts, is to have him post ten trades in the next month and see how they do.

i'll even track them on my playmoney side as well just to test the theory myself, but for me, i'm all for scaling in and out, as have most great traders learned, the hard way, over the life of their careers.

i'm so lost, i don't even know what the argument is any more except that he should stop using smileys to finish his sentences instead of...

period.

Quote from volente_00:

Ever since you started posting trades in your journal, I have only seen 3 or 4 trades where you got out close to a top or bottom, compared to at least 20 trades that you would have gained much more on. On one of those trades along, you gave up 140+ es points in profit. Unless you can catch near the top or bottom everytime, which in your journal, you have proven that you can't. You will be more profitable from scaling out in the long run.

 

[phattails]

Trading is a stochastic process, so are my buy and sell decisions. If I didn't have to account for liquidity, opportunity cost, anonymity, commissions, etc., my buying and selling would be on a continuous basis. So should yours if you care about having the most linear equity curve.

 

[Roman Candle]

Quote from volente_00:

Actually it is a bad point. The more losing trades you have from a % standpoint, the lower your self confidence will become. This will lead to trader's block as well as to closing out winning trades with small profits because of fear. Scaling out smoothes your equity curve while reducing risk. The most difficult part of trading is the exit. Anytime you take an action that prevents a trade from eating into your initial bankroll, you will be gain confidence and will be more inclined to let the remainder run longer knowing you will no longer be able to lose on the trade. The larger your target is, the more profitable it will be to scale out due to probability. This especially holds true for day trading.
You have posted many trades in your es journal that have sometimes went back against your profit 30, 40, 50, 100+ points before you exited. Had you been scaling out, you would have enjoyed much more profit on them.

Confidence is having full trust in your own abilities. This trust must be earned slowly with steady small victories. These small victories add up. Small low risk trades allow you to be objective once again. With each small winning trade, you make a little money and simultaneously rebuild your confidence. Confidence is the key to this game. The world looks so much nicer through the eyes of confidence.

 

[taowave]

To the OP,

As you have laid claim to extensive backtesting,what is your "percent of perfect" score???

 

[Buy1Sell2]

Quote from Buy1Sell2:

The next consideration that must be looked at is the number of times a trader makes decisions. The more decisions that a trader makes, the more chances he will have to be wrong. Traders are more likely to make decisions that are incorrect, thus it is important to keep the number of decisions to a minimum. Each time there is an entry or exit, this represents a decision that is being made by the trader. Scaling requires more entries and more exits and thus creates a greater potential for incorrect entries and exits. It is best to avoid this and the all in/ all out style limits the chances for bad decisions. Good trading everybody!--Ishmael

One must also remember that the trader who scales is attempting to identify the optimal place to scale out. If they scale out more than once , then they will be trying to identify more than 2 places per trade to take profits. Certainly. the scaler is trying to take profits at the best place otherwise why would they be doing it? No one in their right mind would just be taking profits willy-nilly unless they were dealing with being scared (which of course is what scaling is really all about). So, with scaling you have more than one attempt to find optimal exit. This creates more and more decisions that need to be made and more and more chances to be wrong--

 

[Reealjrd]

Quote from CutsThrough:

Is "too big" of a trading size relative to one's capital base or the liquidity of the instrument being traded?

Everyone is so keen to discuss about scalping. I feel it is discussed mostly because of its nature as I can offers shortest duration profit. Scalping attract due to its nature. however scalping is not at all advisable to beginners. as it is the most dangerous strategy and you can loose many in no time.