INCORRECT
"Scaling out" is inferior behavior
- Thread starter Buy1Sell2
- Start date
For entry "scaling in" is just acting upon confirmation. For exiting "scaling out" is just taking what the market is giving.
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Scaling in is superior behaviour?
I now think so.
In markets where stop losses are frequently hunted, scaling in allows a wider stop for that initial position. Nobody knows whether price will move in the desired direction from the outset. By scaling in we're letting the market feedback pull us into a larger position.
I now think so.
In markets where stop losses are frequently hunted, scaling in allows a wider stop for that initial position. Nobody knows whether price will move in the desired direction from the outset. By scaling in we're letting the market feedback pull us into a larger position.
Every single trader that I’ve seen blow it - did it “scaling in”. On the floor, it was called ‘cannon balling’.
YMMV, I wish everyone good fortune!
YMMV, I wish everyone good fortune!
Can we differentiate between scaling in and averaging down?
Scaling in to me is adding to a position that has moved in my favor.
Averaging down is adding to a position that has moved against me.
I scale in. I rarely average down.
So you analyzed their trading edges over all of their trades and verified that their edges were solid and would have made them money had they not scaled in?
Seeing you posted "every single trader I've seen" means that I don't think you did this analysis.
I think these people scaled into non trending environments.
Personally, I scale into winning positions. I never add to losing positions.
“Cannonballing” is adding to a losing position in hopes of mean reversion.
Semantics. My mistake.
“Cannonballing” is adding to a losing position in hopes of mean reversion.
Semantics. My mistake.
My mistake too. I should have been clearer that I meant scaling into winning positions.
Adding to losing positions is a pretty rookie error (unless working an area up to a full position).