"Scaling out" is inferior behavior

[volente_00]

If you had scaled out half of your short position from 1314 at 1080, would you have more or less profit in the trade right now ?


The fact that you have no downside target to exit at and exit nearly all of your trades on trailing stops while giving up a great deal of profit would actually make you more profitable to scale out.


If you scale out right now 1/2 at 1176 and then the remainder gets taken out on your trailing stop at 1271 you will once again be more profitable from scaling out.




End of discussion

 

[Buy1Sell2]

Quote from volente_00:

If you had scaled out half of your short position from 1314 at 1080, would you have more or less profit in the trade right now ?

I would have more if I had taken off the full position at 1080, not if I had scaled out half.

 

[ammo]

Quote from Buy1Sell2:

I would have more if I had taken off the full position at 1080, not if I had scaled out half.

but you didn't,and if we drop to 1020,you will have more for having waited,you chose to ride it ,which has nothing to do with scaling,in the past you've made some great trades riding it and all in /out was the way to trade it,this one went from 234 profit to 134,so your method is costing you at the moment,you have to be.like the market,fluid, flexible,sometimes all in /out is better and some times scaling is better

 

[Buy1Sell2]

Quote from ammo:

but you didn't,and if we drop to 1020,you will have more for having waited,you chose to ride it ,which has nothing to do with scaling,in the past you've made some great trades riding it and all in /out was the way to trade it,this one went from 234 profit to 134,so your method is costing you at the moment,you have to be.like the market,fluid, flexible,sometimes all in /out is better and some times scaling is better

No. Remember we are talking about a trade strategy over the long haul. When I employ a strategy that stays all in, it will reap the best rewards on a few trades that will more than make up for all the supposed savings/winners from scaling. Someone also tried to make a point earlier about not scaling out of a losing position and that is correct--and it's for the same reasons that you don't scale out of a winning position ever.---Basically made the point for me with knowing it.

 

[ammo]

there is no doubt that you feel strongly about this,so strong that you say ever,but the market doesn't support your assertion,strong beliefs are important survival tools,just make sure they don't shun the truth,i don't think you gave a target ,and i hope you can come back and say i told you so when you close,but the profit you have given back(57%) flies in the face of your argument..we've all been there

 

[Buy1Sell2]

Quote from ammo:

there is no doubt that you feel strongly about this,so strong that you say ever,but the market doesn't support your assertion,strong beliefs are important survival tools,just make sure they don't shun the truth,i don't think you gave a target ,and i hope you can come back and say i told you so when you close,but the profit you have given back(57%) flies in the face of your argument..we've all been there

Actually if had felt that 1080 was the place to take off some, I would have taken All off and I would be further ahead right now. However I am not trading the frames that would indicate that 1080 was a place to cover --in fact 1080 is meaningless on the frames that I trade. These are really two separate discussions. One being where to exit and enter and the other being whether not to scale in/out or go all in out. Applying all in/out to any system will reap benefits or lower losses over the long haul. Math doesn't lie.

 

[wrbtrader]

Quote from Buy1Sell2:

Nope--- Trader A makes 12,000 by exiting the full position at 690.

You're still missing the point because a trader A eventually exits a position at some point and he/she can not pretend the position is still open so that he/she can reap the additional profits as if he/she is able to adapt like a trader B.

Simply, in my example...trader A is out of the position and not pretending the position is still open.

Yet, don't misunderstand, I'm not trying to convince you to change from a trader A to a trader B. You just need to understand that there are trader B types out there doing much better than trader A types.

As for myself...I do both (trader A and trader B) as stated a long time ago. More importantly, I've done my own statistical analysis of my own real trading results. In the long term so far of many years of trading...my trader B performance is outperforming my trader A performance even though I do more trader A type trades. Until that changes...I have no intentions of stopping scaling out in certain types of trading situations when math adds up (pun intended).

think outside the box

Mark

 

[Buy1Sell2]

If it makes sense to leave some on from 680 to 690, it makes sense to leave it all on. Over the long haul you will be more profitable or lose less when you trade all in.all out

 

[Buy1Sell2]

Now, the example of the trader who is using a losing system:

Four ES Contracts 90% win ratio all in/all out versus
Four ES Contracts 90% win ratio scaling out at half target.

1 pt target 10 pt initial stop loss

1st example with 20 trades
18 winners for 1 X (4 contracts) = 72 pts ($3600)
2 losers for 10 X (4 contracts) = -80 pts (-$4000)
Net loss $-400


2nd example with 20 trades
18 winners for 1 X(2 Contracts)=36 pts ($1800)
18 winners for .5 X(2 Contracts)=18 pts ($900)
2 Losers for 10 X(4 Contracts) =-80 pts (-$4000)
Net loss $-1300

As you can see, even the trader who employs a losing system will lose less by not scaling out. --Ishmael

 

[ammo]

you're logic is obvious and the strategy is good for you,your style works for one who doesnt have time to watch the market and adjust each day,but your example of the average is skewed, the averager would have shorted at multiple higher prices for a higher avg and covered at multiple lower prices for a lower avg,not necessarily more or less profitable,not carved in stone but that's the way i try to avg,its hard to put a constant on all the moving variables involved in each trade,your wearing blinders, we all are