"Scaling out" is inferior behavior

[Buy1Sell2]

Reminder: this discussion is not about where to enter and exit trades or which system to use. This is also not a discussion of probabilities since that would be an item that a trader would incorporate into their entry and exit point system and decision on which system is more advantageous. This is however a discussion of what to do once the trader has decided where their entry and exit points are. --And full position in, full position out is demonstrably the preferred method as shown in the math 15 posts prior. It's important to not try and confuse this with a suggestion that one should enter at X and exit at Y. I know it may be a difficult concept for some, but you'll get it in time. --Ishmael

 

[bone]

Reminder: this discussion is not about where to enter and exit trades or which system to use. This is also not a discussion of probabilities since that would be an item that a trader would incorporate into their entry and exit point system and decision on which system is more advantageous.

CounterReminder: it is completely unrealistic and dare I say a bit chippy on your part to start a thread with such a provocative title as " Scaling Out is Inferior Behavior" and NOT invite perfectly germane, relevant, and intelligent conversation about where to enter and exit trades, system design, and probabilities.

Position Scaling, by exact definition, is ALL about where to enter and exit trades, system design, and probabilities.

 

[Buy1Sell2]

Point of thread and discussion totally missed by many posters.
This is one of the reasons that I am successful----Many traders miss the boat.

 

[volpunter]

thats why he just ended up on my ignore list. 154 pages by now and I luckily saw it when it reached already 153, and it took me 1-2 exchanges with the OP to figure out that he has some serious comprehension issues. 8183 and 3 likes is another red flag. I hope others do not waste even more of their precious time.

CounterReminder: it is completely unrealistic and dare I say a bit chippy on your part to start a thread with such a provocative title as " Scaling Out is Inferior Behavior" and NOT invite perfectly germane, relevant, and intelligent conversation about where to enter and exit trades, system design, and probabilities.

Position Scaling, by exact definition, is ALL about where to enter and exit trades, system design, and probabilities.

Point of thread and discussion totally missed by many posters.
This is one of the reasons that I am successful----Many traders miss the boat.

 

[Buy1Sell2]

I really enjoy the reading when people are falling all over themselves to dispute and argue off topic subjects. It's a simple mathematically proven premise: When you are in a trade, that has been generated by an entry/exit system that you have created, you will make more money, or lose less money, over the long haul, by not scaling in or out.

 

[taowave]

If this were true,do you take into account volatility of returns,max DD etc?

 

[Buy1Sell2]

That is not part of this discussion. That is taken into account prior to making the trade.

 

[taowave]

You solely address "make more money"/"lose less money". That appears to be your ultimate barometer.

How is it taken into account?

 

[Buy1Sell2]

All true, but in fairness that really wasn't B1S2's argument. He said that of all your trades, some percentage would be huge winners and that your long term P/L depends on getting the most out of them. That means getting the most out of them with your full load, not a scaled back position. I am sympathetic to all the arguments in favor of scaling out, but I have to say that all my backtesting confirms exactly what he said. Your optimal strategy over time will always be to have an exit strategy that ensures you catch those big moves with a full boat.

A corollary of your point, and it's a perfectly valid one, is that what is a "big move" may vary over time. I think the solution to that issue is not to try to optimize targets, but rather to use an exit methodology that gives you every shot at catching the big move.

Marty Schwatz' great book Pit Bull talks about how important itis to get the big moves. He said the majority of his profits came on a handful of days each year. I realize that is totally contrary to the way most daytraders have been taught to trade, ie be consistent, take quick profits, try for a high win percentage, but it sure worked for Marty.

nice

 

[Buy1Sell2]

8183 and 3 likes is another red flag. I hope others do not waste even more of their precious time.

You do realize that some of us who have been here a while have done most of our posting before there were "likes" on this board.