"Scaling out" is inferior behavior

Do you scale out of positions?

  • I always scale out

    Votes: 113 14.1%

  • I scale out most of the time

    Votes: 228 28.5%

  • Most of the time, I do not scale out

    Votes: 189 23.6%

  • I never scale out

    Votes: 270 33.8%
  • Total voters
    800
You've not done the math properly on this. You need to be in winners with full position to reap the best benefit or to lessen losses.

I said I scaled in - that means adding on to winners. When I am in a winner my size is up to 4 times larger than it is on losing trades. That equates to the avg winners profit being much larger than my avg losing trade - that math will make your account surge and is why most pro traders scale in/out.
 
Inferior? Wrong. Why? Because there are many variables that can influence end result in both strategies.

If you want +20 point gain, then I'd make more $ scaling out after +2 gain if +20 is hit 1/10 attempts. Again that's subject to distribution of position (how much is scale out).
 
comagnum said:
I said I scaled in - that means adding on to winners.
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This means that when you are in a winner, you never have your full position on at the best price. Thus, you choke off profits.---Scaling in or out is not a good idea over the long haul--It's readily apparent.
 
Wow, this thread has been going on for 11 years. To me, scaling in/out vs. full in/out really depends on the type of trading the trader can mentally handle. Whichever method works for the individual most of the time is the best trading method for them. I am currently in the mindset of full in/out. I've tried both ways live, and find full in/out works better FOR ME. That doesn't mean it will work as well for someone else.
 
Overnight said:
Wow, this thread has been going on for 11 years.
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I just wanted to post the same. Pretty ridiculous debate because there is no objective answer. Both can work, sometimes one is better than the other other times, you got the picture.

So why are we still debating this???
 
Buy1Sell2 said:
Yes there is. This is discussion about what is better over the long haul. --and it is clearly better to not scale in or out.
---Scaling produces inferior results.---
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OK just to prove you quickly wrong: I have a strategy that enters when price touching the BB. Guess what? Sometimes it is not a complete touch. By scaling in and entering a bit early, I don't miss out when this happens. The same with scaling out, exit is at the BB touch, but sometimes the price just gets close without touching. By scaling out at least with half the position I got out before price returns to my entry level...

If there was a clear answer, this thread should have ended 6 years ago. :)
 
Pekelo said:
If there was a clear answer, this thread should have ended 6 years ago. :)
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Here is the clear answer
GTS said:
Wow, I agree with B1S2 and can't believe that others don't see the obvious truth in what he is saying.

It may feel good to scale out after making 3 pts and hold the rest for the full 6 pts but the bottom line is that one or the other is the correct place to sell everything.

Psychologically it is comforting to take some money off the table and increase your w/l rate but financially it is a sub-optimal thing to do.

I don't see how this is up for debate - all it would take is a mechanical system, run it with three different parameters sets:

First sell everything at 3 pt profit target
Second sell everything at 6 pt profit target
Third sell half at 3 and half at 6pt

There is no chance that the third scenario is going to outperform both of the other two. Either selling all at 3 or selling all at 6 is going to be superior, doing half and half (scale out) just waters down the optimum strategy with the sub-optimal strategy.

I guess if you don't know what your optimal exit point (profit target) is then scaling out could make sense but it seems like it would be worth your time to go through your trade history and figure when the optimal exit point is (would have been) and then just use that going forward.

Maybe I'm missing something but it seems pretty black and white to me.

(Edit: This is not to say that I never scale out, just that I realize what I am doing is not optimal - being human sucks like that)
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