"Scaling out" is inferior behavior

[Lucias]

I don't scale out but the reason maybe different..

The reason is that if I decide to get out of a trade then I've determine something was wrong. Scaling out is really a sign that one doesn't want to take responsibility for their action.. If you exit early then you know you could have gained more or if you wait and miss a move..

It is PURELY PSYCHOLOGICAL. I do not scale out because I'm right most of the time. So, I tried it but realized that I lost a lot more because more-often then not I was right. Based on my experience I always exit entire position.

I will scale in though. The main reason I scale in is because my entry is poor then I can either avoid adding or add a better price. If I feel the market is playing to my expectations then I can add as it goes in my favor.

I almost always use markets on open and limit on exit. I always find this combination works best for me. There are some cases when I use limits but I prefer to do that only when the market is far away. In some cases, I will set a limit so that I can keep track of where I want to be in the market.

 

[ammo]

Quote from Buy1Sell2:

Bottom line-- traders who have been successful scaling out have duped themselves into believing that it helps with their profitability etc. However, they don't realize that the profits would be much more bountiful by letting the full winning position run. It's just common sense.

i got your point for the umpteenth time,the fact that you blindly adhere to this point which only fits your trading style,perfect entry's at top's and bottoms,which ,by the way have not been perfect,has been ignored,despite umpteen example's/references,some siting your own p/l,so am i duping myself or is it you...there are no stupid questions only stupid answers .. letting a full winning position run is only most profitable if you remove at it's peak..whence we all know we don't know

 

[Buy1Sell2]

Quote from volente_00:

Case in point.


I would have lost less money on my short trade today had I scaled out when it went in the money instead of letting it go back into red and hit my stop.


I took your advice and did not scale out and my loss ended up being greater on that trade than if I had scaled out.

Should have removed the full position when you were thinking of scaling.

 

[Buy1Sell2]

Quote from ammo:

.. letting a full winning position run is only most profitable if you remove at it's peak..

All in All out is superior over the long haul regardless of whether one has good timing skills or not.

 

[Buy1Sell2]

No matter what the position size is at the beginning, the trade should be allowed to mature fully. Why would you get out of a winner unless the initial position size was overextended?? Scaling out when overextended is the only time that scaling out should be used. And it is used then, because you have realized that a mistake was made on size initially and you are fortunate enough to escape with some profits. If the size is correct at the start, then scaling out is middle to lower rung behavior.

 

[PushPull]

The following is the only rational approach to this matter. I'm not interested in discussing it, because I know it is true:

Example: You enter short with risk X% to your equity. At the next evaluation interval (for example daily), market has moved in your direction Y%, not enough to adjust your exit stop loss, but your risk has now increased to X+Y %. Since you do not want to move your stop, nor increase the risk to your equity, you exit enough of your original position so that your current risk to your stop resets to X%. If Y% is too small, then you do not adjust anything. If your stop moves in your favor, you may increase your position till you reach X% exposure. If you do not care for your open profits, then B1S2's argument holds as true. If you are using a lot of leverage, your open profits may become significant with respect to your total account equity, so you exit, not only for psychological reasons, but also because your % open risk is too high.

End of discussion.

 

[Pekelo]

Quote from Buy1Sell2:

All in All out is superior over the long haul regardless of whether one has good timing skills or not.

Nopsie-dopsie. I mean you can repeat it as long as you want, it doesn't make it true.
Neither strategy is superior, and both requires timing. If you can time, all in all out is better, if you can't you lose less and you make more with scaling in and out...

End of story...

Quote from Buy1Sell2:

Should have removed the full position when you were thinking of scaling.

See? It is called TIMING...

 

[ammo]

Quote from Buy1Sell2:

No matter what the position size is at the beginning, the trade should be allowed to mature fully. Why would you get out of a winner unless the initial position size was overextended?? .............................................((((( because you have hit a road marker and you are not sure whether it will extend or recede,if it recedes you have locked in some profit ,if it extends you still have a position on to increase profits,unless you know where the top and bottom are, scaling in,in many cases,not all or none,is more profitable ))))))

 

[Riffraffpatrol]

Quote from Buy1Sell2:

Should have removed the full position when you were thinking of scaling.

This is bottom line shallow thinking at best.

I don't care what indicator, backtested strategy, actual results, or whatever method it is you use to form a basis on which to determine the next move in your position... one thing that will never change is the fact that uncertainty will always exist... and ones ability to time the market with perfection is impossible...

I preface my post with this in mind for the simple reason to point out that scaling out provides a method for you to compensate for the cold hard reality of the above...(of which if you dispute it will simply show your ignorant arrogance supercedes any rational thought) in that it allows you to book profit if you are right and the market does indeed turn against you, or in that it allows you to book further profit if you are wrong and the market continues to work in your favor. You get the best of both worlds-- but most importantly, you have reduced your risk dramatically.

No matter how much u continue to flap your trap with your biased opinions and regurgitated cut and pastes- the above are facts that cannot be disproved.

Your shallow mindset could only be proven to be true with 100% certainty under one impossible scenario-- if one had the ability to know the exact high and low. Then anyone scaling out would be an ignoramus. But since we all know this simply can't be done... who's the ignoramus then? Clue- find a mirror.

 

[Buy1Sell2]

No--- Hats off to the trader who has great timing because all in out will benefit them. --But all in all out also benefits the trader with poor timing because it will have them in a winner for full position and will help offset their losses. The point is that all in all out benefits every system whether good or bad. This is common sense and has been proven time again here in this thread. Once you see it, it will be undeniable.