"Scaling out" is inferior behavior

[Buy1Sell2]

Quote from volente_00:

All you have done is proven my point. You claimed you could find the optimum exit point on every trade, yet your trade's show that you have given up 40+ % of profit on every trade by exiting all at once. This shows that "all out" is less profitable than scaling out.

No. I said that anyone can find the optimal exit point for a trade over the long haul. I use trailing stops, not profit targets though and that allows me less decision making and more ability to have my profit grow very large when I am in a real runner. On each specific trade, I may give back money, but over the long haul, I will make much much more. In any event, scalers probably would have taken some profit at 10 pts 20 pts etc and would never have gotten to the 56.75 over the whole position like I did. My system is superior. It doesn't mean that I am superior, but in fact. my system is

 

[JSSPMK]

When I used to trade All In All Out I couldn't achieve a positive equity curve, when I started scaling out (not scaling in) I started to make consistent gains. So in my case All In All Out was not an inferior strategy.

 

[Redneck]

FWIW

Is “scaling out” inferior behavior – to me

I think the term “inferior” could be construed as “inept” – so for this post – I prefer to use the term “less profitable”



I believe scaling out to be less profitable – 98% of the time

I believe scaling out to be more profitable – 2% of the time

Because

If I have the skills to determine when to enter a trade – then by default I have the skills to determine when to exit a trade – and I do about 98% of the time


The exception is when I lose mkt direction….., or my position size is such that exiting all at once would cause significant slippage (but then I’ve not used volume analysis properly have I )

RN

 

[BSAM]

Put me in the "inferior behavior" group. I think scaling out is a good thing. I'm real smart, (wink, wink) but I don't know what mr. market is going to do, so I'd rather take some off the table, then hold out my hands (position) for whatever else I can get.

 

[Redneck]

Quote from BSAM:

Put me in the "inferior behavior" group. I think scaling out is a good thing. I'm real smart, (wink, wink) but I don't know what mr. market is going to do, so I'd rather take some off the table, then hold out my hands (position) for whatever else I can get.

IMO

This gentleman is just as correct as I

As no one shoe size fits all – no one approach to exiting a position – fits all

regards

RN

 

[Milton]

Quote from BSAM:

Put me in the "inferior behavior" group. I think scaling out is a good thing. I'm real smart, (wink, wink) but I don't know what mr. market is going to do, so I'd rather take some off the table, then hold out my hands (position) for whatever else I can get.

I agree 100% with you.

 

[RTimeNetCoder]

Consider the scalper who also wishes to not miss a breakout, so only scalps with half of the total position.

Is this "inferior behavior?"

Black and white now... gotta answer with a yes or a no!

 

[DrEvil]

I believe it all depends on your time frame. If you are scalper in a fast market you are better to scale out at optimum levels (levels where you believe that statisically you would be wise to take a profit). If you are like me (a swinger baby) I have found that you want your full position on till it's time to get out.

Each to their own ...

 

[RTimeNetCoder]

Quote from DrEvil:

I believe it all depends on your time frame. If you are scalper in a fast market you are better to scale out at optimum levels (levels where you believe that statisically you would be wise to take a profit). If you are like me (a swinger baby) I have found that you want your full position on till it's time to get out.

Each to their own ...

Yeah, I find I make about 2x as much this way. I am essentially playing two games at once!

 

[jjf]

Quote from RTimeNetCoder:



Yeah, I find I make about 2x as much this way. I am essentially playing two games at once!

You will make even more money when you wean off the sim onto a real account.
On the other hand you might lose your balance.