Interesting that you should mention psychology, because that is another of the main reasons for not scaling out. Human behavior is repeated over and over and reflects itself in the technicals. Until the technicals say otherwise, you should stay in the whole trade.
Scaling adjusts both reward and risk. Most traders who rule out scaling are too binary to see the fact that risk is favorably adjusted.
Have you ever traded 10 positions at the same time, 3 minutes after the open, all manually? Hmmm.... ? Scaling out is a valid way to manage risk, take advantage of statistical odds of certain price moves and capture price spikes you can't react to fast enough. It has nothing to do with being 'scared' or 'wildly over extended'. You come across as closed-minded and generally clueless when you make blanket statements of certainty regarding the markets.
In my opinion, it is only inferior if the trader knows where prices will turn. As a mere mortal, I accept my limitations and the compromise of exiting at more than one level. It is akin to walking in the dark in unfamiliar territory. Better to feel your way and move cautiously rather than run full speed into a wall while making great time. But that's just me. Of course, if I were a trading god, I would play it differently.
You are a far better trader than me. Until I acquire the ability to pick the exact end of a move I will have to settle for the inferior practice of scaling out.
good point lescor, certainty we project to much of our needs onto the market at times. scaling out is a very valid way of trading, because if you get a below avg move, you still have have created a risk free or at worst a breakeven trade.
I could not agree less with you. IMHO, B1S1 is trying to draw out trader´s opinions and successfully so as he drew out yours.
Why do people post simplistic "truths"? When I "scale out" and take a profit... The money goes right back to work in another position. While someone sits on a position for a week and MAY take a slightly bigger profit... I will have scalped in and out 10 times and made more money. And here is the BIG point: If you scalp in and out aggressively... Your RISK IS MUCH LOWER than holding medium term positions. There are reasons all the smartest Big Players... Are all building algorithmic scalping Bots as fast as they can. Buy and Hold is sub-optimal in today's decimal, near-zero transaction cost markets.
Is this the extent of what you can throw at me?? Simplistic? , Clueless?, Closed Minded? Come on folks, my portfolio is growing as I type with minimal trade activity and very little energy expended. If that is simplistic, then I accept the description.
No. I am a position trader who occasionally puts on a swing trade. I view daytrading and trading at the open as inferior behavior as well.