Please participate in the poll and feel to provide any commentary you feel is appropriate. I would appreciate it if the respondents would limit their responses to intraday equity index futures trading. I scale out because it makes for a less volatile equity curve.
It depends on the signals the market is giving, often I scale out and exit half the position and move the stop to break even on the remainder to lock in profit and to allow my profit to run if I think there is more room.
This is an interesting subject. I find the idea of scaling in and out very appealing but I go all in and all out. Mathematically I dont think there is any advantage to either method. At least thats what Ive read. So I guess its just a question of what youre comfortable with.
Good point. That alternative occurred to me after I created the poll and was no longer able to change it. My apologies. Let's see if the moderators can help us here.
Moderator(s): Would you kindly add an additional (fourth) alternative to my poll? If so, please phrase it as follows: I scale both into and out of intraday equity index futures trades. Further, could you please make this new alternative the third option from the top? Your help would be much appreciated.
All else being equal, and in the long run, I think that you may have a good point. That is why I have chosen what I believe to be the least bumpy ride.
It is a function of money management really. You are using the profits from a trade going your way to add more based on an additional entry signal. On the exits, it is good to know what target lies ahead in a distance, but I trade it better when I peel some off to have a free trade if it doesn't go. I can't imagine being precise enough to take all in and all out in one go. It is a matter of preference. This, of course, is from the perspective of a scalper.
Your post makes good sense to me. What you regard as scaling in based on an "additional" (subsequent) signal, I would simply regard as a "separate" signal. However, I like to scale out for the same reason that you do. The scaling out has nothing to do with a subsequent signal, but is the result of reaching an interim profit objective. Apart from our timing, we may be doing similar things but simply describing them differently.
i use a scale in method for entry, and I scale out according to my latest entry cost basis for manual trading.