"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 being realistic V in a self serving thread, the intent of which is to be pedantic and intractable.

    regards
    f9
     
    #1071     Mar 27, 2008
  2. Buy1Sell2

    Buy1Sell2

    This is an attempt to change the discussion to whether or not to position trade or day trade. It's not relevant. Just remove a couple of zeroes on the 100 and 200 and you get 1 and 2. :)
     
    #1072     Mar 27, 2008
  3. volente_00

    volente_00


    Scaling out offers you a higher % win rate which in return over time nets higher returns. I'll take 80 % scaling out over 30 % not scaling out any day of the week.



    10 trades


    8 winners for 4.5 points
    2 losers for 3 points




    3 winners for 9 points "FULL POSITION"
    7 losers for 3 points




    Who is more profitable ?
     
    #1073     Mar 27, 2008
  4. Buy1Sell2

    Buy1Sell2

    Thanks SS, Very appreciative of your efforts. :)
     
    #1074     Mar 27, 2008
  5. volente_00

    volente_00




    Not to sound arrogant, but if you can trade ES well, then what B1 made on 1 swing trade can be made in just one volatile day under the current marker conditions. To a capable day trader, every day under these current conditions offers the opportunity to capture 10 to 30 point minimum. To each his own.
     
    #1075     Mar 27, 2008
  6. volente_00

    volente_00


    so you would have scaled out half for 228 points and let yourself get stop out on the other half for the same 140, You would have made $4400 extra per contract on the half you scaled out and overall the trade would have been more profitable.
     
    #1076     Mar 27, 2008
  7. Buy1Sell2

    Buy1Sell2

    I was hopeful that someone would point this out instead of me. Thank you GTS!!
    This is exactly right. Using limit orders to get out to try and avoid slippage is not scaling. I still don't recommend trading markets or such size that market orders are not viable. This is playing with fire in my view, but is another subject really. After all. if you are using a stop loss order which most say they do, then you are using a market order. Anyone that feels that they need to use a stop limit order is trading too large or is trading an illiquid market.:)
     
    #1077     Mar 27, 2008
  8. volente_00

    volente_00

    B1, do you not agree that if you have 2 exact traders and one person scales out and the other does not, then the one who scales will have a much higher % win rate with lower points per trade won than the non scaler who will have a much lower % win rate with higher points per trade one ?
     
    #1078     Mar 27, 2008
  9. Buy1Sell2

    Buy1Sell2

    The example you have outlined here is of two different non scaling approaches. Neither example showed any scaling, so it was an exercise to find the optimal target with full position only. :)
     
    #1079     Mar 27, 2008
  10. Buy1Sell2

    Buy1Sell2

    This is not relevant to the discussion. You are trying to change this to a debate about swing/position versus day trading. I have already indicated that the math works on any time frame. :)
     
    #1080     Mar 27, 2008