There is no optimal scenario that works for each trader. All depends on the characteristics of your trading plan. Each trader has a different trading plan, which leads to different difficulties, different risks, and different results. So you should build the optimal scenario for yourself by analyzing the statistics from your trading plan. I did a test on roughly 1,000 intraday trades. These were the conclusions: I need to place a stop at 0.125% of the notional value. So today that means a 5 point stop in the ES. Years ago it was only 2 points ES as the index was much lower. If I place a smaller stop, I lose profits as profitable trades get stopped out before they really start to go. So turning a profitable trade in a losing one. Very damaging for your performance as you lose a profit and catch a loss. If I place a wider stop, I don’t make any additional profits and I lose more in each losing trade as the stop is wider. So my profits stay the same and the losses grow. I always go in full as the open loss on the entry signal, that I need to make better entries, is too small to improve my entry price. So scaling in means losing money as the average entry price gets worse. On top of that the risk increases as the average entry price is worse, so the loss gets bigger too. I always get out full, as I have the same problem as when getting in a trade. Scaling out will cost me money in the long term. The past 2 years I was focusing on taking intermediate profits, and getting in again after a retracement. With the actual volatility it is a profitable strategy. At extreme levels I close my trade and reopen it after a retracement. If I miss the entry signal in the retracement, I can always still jump in at the price I got out before. So no risk of losing a futur big move. It will cost me just an extra commission in worst case. I also reinvest the profits from the intermediate exit, so the size grows in general, which means extra profits from the retracement AND extra profits from the grown size. Took me hundreds of hours to find out how to do that in a profitable way.
To scale out is like to trade 2 (logical) accounts at the same time - each with a different take profit level. If you do this for some time already, you can just calculate and compare how each account alone and the “ensemble” account perform.
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 bevior.
I cant recall seeing Kullamagi do anything other than scale out of his winning trades. It even says as much on his instructional web page. Of course he only trades stocks,not futures.
The platform he uses to chart (TC2000) has "SIM" on it in every video he posts. He addresses this on his website and says that he uses a different platform to trade and uses the one with SIM to chart, but I have caught him "moving stops to secure profit" on the TC2000 Demo account. I asked myself why he would be moving his stop to secure profit if it's just a demo account? I wish I could still find that vid. Not about to go through 20 hours of his material looking for it again. I think he slipped up is what I'm saying. All of these people seem to have excuses for things other people call them out on. Why do none of these people post tax returns? It's easier to say you're profitable than to prove it. Why these people troll the public I will never know. He's not selling anything so why else would he do it if not to troll?
To attract views and likes to his channel. Youtube really starts to pay off as you get more and more views on your monetized content.