"Scaling out" is inferior behavior

Discussion in 'Strategy Building' started by Buy1Sell2, Oct 18, 2006.

Do you scale out of positions?

  1. I always scale out

    113 vote(s)
    14.1%
  2. I scale out most of the time

    228 vote(s)
    28.5%
  3. Most of the time, I do not scale out

    189 vote(s)
    23.6%
  4. I never scale out

    270 vote(s)
    33.8%
  1. You are correct. His financial performance is not really any of our business. However, when someone preaches fundamentalist dogma of any kind, then I take exception and ask for evidence of such acute righteousness. And lovely as his alleged numbers may be, unfortunately his mere say-so doesn't quite do it for me. And even at its face, we have no idea of the volatility of his performance in the way of drawdowns or its consistency over time. These are decidedly slim pickings for anyone other than members of the choir.
     
    #1021     Mar 26, 2008
  2. I agree.
     
    #1022     Mar 26, 2008
  3. Sorry, market orders are for chumps for the most part on smaller time frames. You really have proven you have absolutely no idea what you are talking about, except for maybe 100 shares each way.

    Like everyone here is trying to point out to you, it's all relative. If you can make 5-figures daily intraday, would you still feel it a waste of time? Quality of life?? Why not make a million daytrading 6 months of the year, then spend the rest of the year enjoying that money? Silly rabbit.
     
    #1023     Mar 26, 2008
  4. romik

    romik

    I can say this, nobody will win this as theoretically B1S2 is totally correct, but many short term traders will not be able to trade that way.

    The reason that people won't be able to achieve this is because their strategies are hooked on building a lot of primary target hits at which point they would close position once it retraces back to where they entered. I bet my sweet ass that if you were to look at their trades you would find a hell of a lot of primary target hit trades where they scaled out & closed remaining position once price retraces back to entry point. That's where their strength & weakness is.

    Their win rate of hitting primary target is most likely quite high, secondary target around 50% or even below that, as if it was higher than 50% there would be no reason at all to scale out, doesn't make sense.
     
    #1024     Mar 26, 2008
  5. B1S2

    The relevance lies in the fact that SS is quoting a figure of 80%+ supplied by you.

    One minute you are throwing figures around to support your ego and the next minute you decide they are not germane to the case because the direction you are being taken in, frightens you.

    You are the one who consistently compares term trading to intraday.
    They are chalk and cheese even to a novice and so there is something about your failure to master intraday that is obviously haunting you.

    From your postings, you still take on the appearance of a paper tiger.

    regards
    f9
     
    #1025     Mar 26, 2008
  6. Buy1Sell2

    Buy1Sell2

    It's really just a simple math premise that I talk about here. The following is an example of the equation. Notice how the trader who scales may actually be able to boast that his win percentage is 66.67% as opposed to the non-scaler who has a 50% win percentage but makes more money. Simple math folks, but many want to throw irrelevant information into it--





    Four ES Contracts 50% win ratio versus Four ES Contracts 50% win ratio scaling out at half target.

    9 pt target 3 pt initial stop loss

    1st example with 20 trades
    10 winners for 9 X (4 conracts) = 360 pts ($18000)
    10 loser for 3 X (4 contracts) = 120 pts (-$6000)
    Net profit $12000


    2nd example with 20 trades
    10 winners for 9 X(2 Contracts)=180 pts ($9000)
    10 winners for 4.5 X(2 Contracts)=90 pts ($4500)
    10 Losers for 3 X(4 Contracta) =120 pts (-$6000)
    Net profit $7500

    Money can be made scaling out, but it is inferior behavior.
     
    #1026     Mar 26, 2008
  7. No, that is incorrect... see prior posts... :p


    <img src="http://www.enflow.com/p.gif">
     
    #1027     Mar 26, 2008

  8. You are digging a deeper hole for yourself B1S2, I would suggest that you cease digging.

    regards
    f9
     
    #1028     Mar 26, 2008
  9. Buy1Sell2

    Buy1Sell2

    I have examined prior posts already. This math is exactly correct. :)
     
    #1029     Mar 26, 2008
  10. Beware the carefully chosen example. A bespoke tailor would be proud. By "simulation," I think that taowave meant a real-time example, not a fabricated, self-serving one.

    Forgive me, but I think that density may be impeding your absorption capability.

    Over and out.
     
    #1030     Mar 26, 2008