You say you're not dealing with hypotheticals, but that's exactly what you're doing. How did you pick these arbitrary numbers? Math is very simple, try changing some of the variables in your example and you can easily come up with scenarios where scaling in and/or out would've outperformed all in/out. I won't bother with coming up with a hypothetical to support this, but surely you see that, don't you? The bottom line is, there is no "one size fits all" here- in some situations, it's better to scale, and in others, you're better off not scaling.
It's simple. As B1S2 has stated numerous times in this thread, he has advance knowledge of the optimal exit point for every trade before the trade is placed. If this is the case, he obviously has access to other data which the rest of us do not have. The numbers he is picking are not arbitrary. They support his hypothesis, therefore they are based in reality. Whatever supports his hypothesis is based in reality. Numerous people have shown him examples where scaling out is not optimal behaviour. His response is always the same. There is no need to provide any independently verifiable numbers to show that scaling out is sub-optimal in every conceivable trading situation. It is enough for him to say: "Yes, it is".
If a person scales out and the portion left on continues to make money, the it did not make sense to scale out. If a person scales out and the portion left on loses money, then it did not make sense to scale out. It is always better over the long haul to discard scaling.
False. I said that anyone, not just myself, can calculate an optimal target for a particular type of trade (set up). In other words, anyone can define a setup and then determine how many times it goes 80 ticks, 70 ticks etc and then figure out what the optimal target over the sample is. Sometimes it would go farther, sometimes not as far and sometimes get stopped out. Anyone can do this.
But if one had scaled out half at 1255, how much more profit would the trade produced ? Show me 1 time period on the S & P chart where it has went down 300 points without having a 100 point bounce in between.
The math doesn't care what type of system is used. Scaling will always provide an inferior result over the long haul due to the simple fact that when the full target is hit, the full position is not on to reap the full benefit. It just doesn't matter what the system is. Reminder: There are many profitable strategies, but only one proper way to trade and that is to have the full position on without scaling , cutting losers short and letting the winners reap the full maturity benefit.
No. If I would have decided to get out at the point you are mentioning, I would have exited the full position and not scaled out and that would have reaped a larger reward than your suggestion of scaling. You're missing the crux of the discussion.
Your example is flawed because you use 100 + point stops and try to capture 200 + moves. You will get hundreds of 9 point moves over the same time period that only 1 200 point move happens.
Thanks Romik. That is exactly right. Parameter change on one side has to be duplicated on the other side. That is reality. If the signal is 90 percent, then the non scaler would have a fantastic benefit. Again thanks for pointing this out!