"Scaling out" is inferior behavior

[romik]

Of course! 40 were b/e after a failure swing

 

[Buy1Sell2]

Of course! 40 were b/e after a failure swing

What you've done here is introduce a variable to one side of the equation, without allowing it on the other side. Once the parameter of scratching 40 contracts is introduced on the non scale out side, you have a savings of 6000 resulting in a 12000 profit.
If you want to look at it a different way, you could say that the 40 contracts ran to a 3 pt loss and thus the scale out example only made 4500. Either way, the non scale out strategy nets 1500 more.

 

[Buy1Sell2]

Bottom line---any strategy over the long haul, will perform better by not scaling in or out.

 

[Buy1Sell2]

Now that the debate over Technical Analysis is over and we know that it does indeed work, I am happy to get back to what I really enjoy which is the application of TA and risk management combined. Refraining from scaling in and scaling out is not just a good strategy, it is a huge part of risk management. Some would say that risk management is about setting initial stops, but it is not just that. It is also about maximizing gains when you are right. This reduces your overall risk and thus by not scaling, a trader reduces their risk greatly.

 

[d08]

Go tell that to the traders with big positions relative to liquidity.

This is one of those "traders can trade only ONE way and it's MY WAY" threads but I've seen it before from the OP regarding the usage of stops.
For some strats, scaling out makes sense and for some it doesn't. Winners don't always "run" as we'd like them to and quite often just revert.

 

[Buy1Sell2]

Go tell that to the traders with big positions relative to liquidity.

OFF TOPIC

 

[Buy1Sell2]

Winners don't always "run" and quite often just revert.

EXACTLY RIGHT

 

[Michael.jstocks]

Now that the debate over Technical Analysis is over and we know that it does indeed work, I am happy to get back to what I really enjoy which is the application of TA and risk management combined. Refraining from scaling in and scaling out is not just a good strategy, it is a huge part of risk management. Some would say that risk management is about setting initial stops, but it is not just that. It is also about maximizing gains when you are right. This reduces your overall risk and thus by not scaling, a trader reduces their risk greatly.

FALSE!!

 

[barcadia]

Bottom line---any strategy over the long haul, will perform better by not scaling in or out.

100% INCORRECT!

 

[Scataphagos]

Bottom line---any strategy over the long haul, will perform better by not scaling in or out.

Seems like some folks don't agree with you (us).

I don't know about your specific conclusion here.... perhaps players need the "margin for error" scaling appears to provide to be able to "act at all" (?). However, I've traded for years and have never scaled in/out.... though I can envision one scenario where I might.