"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. romik

    romik

    Of course! 40 were b/e after a failure swing
     
    #1581     Oct 8, 2015
  2. Buy1Sell2

    Buy1Sell2

    What you've done here is introduce a variable to one side of the equation, without allowing it on the other side. Once the parameter of scratching 40 contracts is introduced on the non scale out side, you have a savings of 6000 resulting in a 12000 profit.
    If you want to look at it a different way, you could say that the 40 contracts ran to a 3 pt loss and thus the scale out example only made 4500. Either way, the non scale out strategy nets 1500 more.
     
    #1582     Oct 8, 2015
    romik likes this.
  3. Buy1Sell2

    Buy1Sell2

    Bottom line---any strategy over the long haul, will perform better by not scaling in or out.
     
    #1583     Oct 8, 2015
  4. Buy1Sell2

    Buy1Sell2

    Now that the debate over Technical Analysis is over and we know that it does indeed work, I am happy to get back to what I really enjoy which is the application of TA and risk management combined. Refraining from scaling in and scaling out is not just a good strategy, it is a huge part of risk management. Some would say that risk management is about setting initial stops, but it is not just that. It is also about maximizing gains when you are right. This reduces your overall risk and thus by not scaling, a trader reduces their risk greatly.
     
    #1584     Oct 9, 2015
  5. d08

    d08

    Go tell that to the traders with big positions relative to liquidity.

    This is one of those "traders can trade only ONE way and it's MY WAY" threads but I've seen it before from the OP regarding the usage of stops.
    For some strats, scaling out makes sense and for some it doesn't. Winners don't always "run" as we'd like them to and quite often just revert.
     
    #1585     Oct 9, 2015
  6. Buy1Sell2

    Buy1Sell2

    OFF TOPIC
     
    #1586     Oct 12, 2015
  7. Buy1Sell2

    Buy1Sell2

    EXACTLY RIGHT
     
    #1587     Oct 12, 2015
  8. FALSE!!
     
    #1588     Oct 12, 2015
  9. barcadia

    barcadia

    100% INCORRECT!
     
    #1589     Oct 12, 2015
    Spooz Top 2, i960 and Eddiemorra like this.
  10. Seems like some folks don't agree with you (us).

    I don't know about your specific conclusion here.... perhaps players need the "margin for error" scaling appears to provide to be able to "act at all" (?). However, I've traded for years and have never scaled in/out.... though I can envision one scenario where I might.
     
    #1590     Oct 16, 2015