scaling in and the purpose.

Discussion in 'Index Futures' started by pumpkinhead, Feb 9, 2007.

  1. I don't get it. If somebody wants to buy 10 or 20 contracts of the emini ES then why should they scale in instead of just buy the 10 contracts? People say because you don't want other traders to see what you are buying or shorting. But I don't see why it would make a difference if they see that we just bought 20 contracts. If they see we just bought 10 or 20 contracts then they might buy also and that will force the index higher and that is what we want for it it to go higher so we can sell. Why not just buy them all at once? Why scale in only 10 or 20 contracts?
  2. Scaling in based purely on size can be debated all day. I doubt the ES is going to move on your 20 lot, but who knows.

    HOWEVER, if your trading methodoloy works better scaling in/out, that makes perfect sense. Some people like to 'test the water' before going heavy vs. going heavy all at once.
  3. Institutions do it all the time.

    There must be something to it and I suspect they have a price range they want to get in at.

    Simply, I think most of us retail traders that do the same...we have a range we want to get in at.

    Therefore, I know for fact that there are those that scale in and it has absolutely nothing to do with not wanting others to see what we are buying or shorting.

    However, I have met a few guys that scale in because they fear there will be too much slippage if they try to go all in at once (these guys trade very large).

  4. if you believe some patterns (or market conditions) are more bullish (or bearish) than others scaling in and scaling out follows
  5. Neet


    It's a matter of accuracy and anticipation.
  6. Often time areas of support/resistance and breakouts are tightly grouped. Scaling allows for maximum participation with equal risk and larger reward.
  7. ===============

    Shortest of the short term traders may not scale in;
    or even want to. Some high probability set ups mabe put it all on at once.

    Since ES market doesnt trend most of the time;
    scaling gives you diversification in time , in price

    ''Only 20 contracts''???????;
    most arent going to spend /risk over a million dollars[contracts value] with one click.

    Unless ES is on a trending day/ shallow retracements;
    retracements favor scaling in. Even more on long side

    Scale out some time for same reason;
    including not limited to less pressure to pinpoint''one''right exit