Mark, You have taken the time to say what I just could not be bothered to. I am afraid that once a paper tiger reveals himself I just lose interest very quickly, especially with ones married to dogma and to the ridiculous. regards f9
To take this "as advice" to go market on a size order in a thin or illiquid market would be very unwise... <img src="http://www.enflow.com/p.gif">
2 points all should be aware of in deciding whether or not to continue this discussion: 1) The thread starter made his money on riding long term trends in major markets. 2) The thread starter also gave up on intraday trading because it was "a waste of time" (see other threads). Now in light of the above (and please correct me if I am wrong, b1s2), you can see why he would/could start such a thread with such conviction -- and also why 2) should be the obvious case. To say that if one cannot trade a position at a single price at a single moment, a trader should cut down his position size, is a complete fallacy. Any trader worth his salt <b>learns</b> to scale his positions, both entries and exits, if the conditions demand it -- THAT is reality. Do you really expect us to believe that the best traders on the street always enter and exit at one shot? No wonder you would have trouble intraday -- the MMs eat that all-at-once shit up. Stay with your multi-month, once in a decade trendfollowing, where perhaps your theory works best, but stop making me puke with the one size fits all bs.
Enough said? Regarding intraday swing trading (NOT scalping): Scaling out winners only makes more sense if you also scale out losers. Otherwise, you're cutting winners short. It should be the other way around. Trailing stops help lock in gains/limit losses fine enough already. Stops should be trailed more closely as the target is in sight. If I am willling to risk 2 points for a potential six point gain, for instance, why would I get out at less than 6 unless I have to? The market will make it loud and clear if I have to. If one uses stops appropriately and judiciously, there is no need to scale out of a winning position.
You have all got the cart in front of the horse. Firstly, you need a strategy and into that strategy will fit your theories on scaling and many other things. I do not scale. Each trade is a new adventure because I believe in trade size and I will leave you all to figure out the logic. The reason behind trying to bring this thread to a sensible conclusion is simply because the underlying logic of the OP does not reflect that of a seasoned trader and therefore layers confusion upon confusion upon confusion. "One size fits all" belongs to paper tigers. regards f9
A winning strategy can become a loser because of money management and position sizing. One size does not fit all, but some sizes are better than others.
Agree... The OP's thread is lacking in strategic and tactical thinking... as if life were a flat earth construct... Even Math is flawed (some posters are using Math to prove not scaling out is the best method) and does NOT exist as a perfect way to measure... that was demonstrated way back in 1931 with Godel's Theorem... http://query.nytimes.com/gst/fullpa...2A15755C0A961948260&sec=&spon=&pagewanted=all The world is NOT linear and neat... It is chaotic and messy... and chaos, or life, is built out of scales at all levels... it only appears that it is neat and linear... http://en.wikipedia.org/wiki/Fractal Tactical and Strategic Scaling out, as well as sometimes dumping all at the market, is congruent with the way things are... not with the way the OP wants the world to be... as if the world were his black and white one dimensional flat earth plaything... <img src="http://www.enflow.com/p.gif">
Exactly. It is quite strange that the OP doesn't seem able to grasp the idea that there are many different ways to trade and that what is optimal in one case may not be optimal in another. RM's question about how a trader might be expected to move a very large position without scaling illustrates one obvious situation in which scaling out is clearly optimal. We need look no further than the OP's basis for his argument. When pressed, he admitted that he believes he knows the optimal exit point for every trade at the moment the trade is placed. Of course this is ridiculous. Certainly you can have a target, but to suggest that the optimal exit point can be known in advance is obviously wrong. What is interesting is the number of people who responded to the poll saying that they never scale out. This shows that psychology plays a big role in determining how each individual approaches the markets.
False. What I said was that over the long haul the optimal target can be calculated for a particluar signal and timeframe. In other words, it can be determined what percenatge of the time a setup will carry you so far and thus the pobability of a particular targets can be calculated ( By the way, everyone can do that). I make no assertion that I know before a single trade how far that single trade will go. By the way, I don't use targets anyway, I prefer the trailing stop. Either way, the math is the same. I am better off not scaling.