qwiktrade
.. the problem with scaling out is that it ruins your risk/reward because every trade that goes the wrong way immediately will cost you on the full lot.. then whenever you get a nice winner, you only have half a position on..
That is the same conversation I have had with myself for the last 18 hours. And this is not the first time I've had it.
Basic Premise: With scalping or other short term positions, you need to have your full position on right away, because you don't have the luxury of adding to positions like the longer term swing, or position trader has.
I'm thinking of taking half the position off after 1.5 to 2.0 point move, and then letting the rest ride. Either I hit my first target and get out, or hit my first target and move my stop to protect profits,and wait for the second target (usually pretty generous)... or I get stopped out at breakeven on the second contract. The trick is to take only the low risk moves, where the stop can be tight, 1-2 points based on the price action, not just money as previously discussed.
I'm finding trading is like climbing a mountain, except instead of just barging straight up, you walk around it in ever decreasing circles. The big ravine you fall into (insert your common problem here), and claw your way out of, is not as deep and difficult after you circled the mountain once. You are further up the slope, but you can still see where you stumbled into it as you look down. And you still fall into it. On a subsequant circle, all of sudden you see that that ravine is not as wide, and you can, with alot of effort, just jump across, and continue your journey. The next trip around, you are stepping across it without giving it any thought.
Once you reach the top, you see you just scaled (pun intended)the foothills.
I don't have the answer to the scaling out thing.
Hey... you old wise traders... care to share your wisdom on the wisdom of scaling out of a short term trade (1-10 minutes).
Thanks in advance.
