"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. Buy1Sell2

    Buy1Sell2

    Hopefully, it will sink in after awhile as it really is correct. Once you see it, it will be undeniable.:)
     
    #1421     Aug 14, 2011
  2. volente_00

    volente_00


    only if the system has a fixed target. You system does not and almost always ends up getting trailed out of the trade after giving up a lot of profit. Since your target is unknown, you would be better off scaling out. If you had a fixed target then you are better off not scaling out. But then your winning percent comes into play. If by not scaling out you only win on 20% of your trades and by scaling out it increases your win rate to 70% then it will probably be more profitable to scale out. My exits vary, sometimes I have multiple targets and I would rather exit some and trail my stop to breakeven then exit nothing and have a winning trade turn into a loser due to my ego.
     
    #1422     Aug 14, 2011
  3. volente_00

    volente_00


    but you did not because you have no fixed target so the fact remains your short from 1314 would be more profitable now if you had scaled out half at 1080 instead of letting 100 points of profit evaporate on that half.
     
    #1423     Aug 14, 2011
  4. volente_00

    volente_00


    Your example is flawed because only a moron would trade with that inverted of a risk to reward ratio.
     
    #1424     Aug 14, 2011
  5. talking discretionary here :

    i think decision how to get out depends on how you feel about the market at the time. If you are nailing it time after time, then one out is acceptable. If things confusing and cant 'see' then exiting at various levels is fine.
    However, i found out once I am out 50% of size, motivation falls and not putting in 100% anymore. So, if I dont 'see' simply quit once profit is acceptable.

    10% position exits are fine for me as they give me enough meat to carry on and still have this feel that I benefited from market beeing so much in my favour. I remain balanced and continue to 'see' market.

    overall i lean towards one exit.
     
    #1425     Aug 14, 2011
  6. Math doesn't lie -- that's about how much you can be trusted :)
     
    #1426     Aug 15, 2011
  7. Buy1Sell2

    Buy1Sell2

    That may be true, but that again is a different discussion ie as to whether or not someone picks entries and exits well. The reason for showing this example is to show that no matter what system is being used, whether a winning system or a losing system, alli all out performs better.:)
     
    #1427     Aug 15, 2011
  8. Buy1Sell2

    Buy1Sell2

    You are missing the whole discussion. For purposes here, let's just agree that I have a sub par system for identifying entries and exits---- I still do better unto myself by trading all in all out.----and so would everyone else.:)
     
    #1428     Aug 15, 2011
  9. volente_00

    volente_00



    On nearly all of your trades you give back 30 to 50% of the profit by letting them go back to your trailing stop.

    By scaling out just 1 % of your position on any of these past trades before they gave back that amount of profit would have made you more profitable.


    The only way this would be any different is if on the majority of your trades you start closing at fixed target instead of letting the market take you out along with 30-50% of your profit.
     
    #1429     Aug 15, 2011
  10. Buy1Sell2

    Buy1Sell2

    You're still trying to argue that my system of exits and entries is bad. Thats a different discussion. The fact is that if I had seen something at 1080 that would have made me think it was an exit point, then I would have removed all, not part of the trade. By taking all off at my exit, I do better than removing some early say at 20 points profit which is what scalers do--they remove some as soon as it gets in the money to obtain that psychological crutch that they are a "winner". Th all in all out trader will reap the greater benefits over the long haul by going for full maturity of the trade. :)
     
    #1430     Aug 16, 2011