"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. It occurs to me that without a good simulation run across various markets looking at strict criteria for:

    a) holding a trade or;
    b) scaling-out

    We will not be able to quantitatively see the truth or falseness of the statement. While very good arguements can be made for either case, you actually must at least run a backtest using fixed criteria to see what happens.

    Does anyone have access to software that can do this?

    I don't.

    Regards,

    Jimmy
     
    #241     Oct 24, 2006

  2. LOL, have you put on a trade since then? (just kidding)


    I would like to point out here that what B1S2 is advocating is the time-tested 'classical' method of trading commodity futures on longer timeframes. The very famous "Turtle" trading rules - developed by the legendary Richard Dennis - use precisely this strategy. Entries are always scaled-in while exits are NEVER scaled-out.

    Like B1S2, I too have been trading for a very long time and find this strategy to be excellent on longer timeframes. I have also been day-trading index futures for nearly ten years now. In that intra-day timeframe, it is not very difficult to out-perform this type of strategy.

    Happy trading folks :)
     
    #242     Oct 24, 2006
  3. Looks like you must know how to sell snail oil very well. :D
     
    #243     Oct 24, 2006
  4. This thread is basically limit poker vs no-limit poker thinking -- I hope people can guess which is which.
     
    #244     Oct 24, 2006
  5. Buy1Sell2

    Buy1Sell2


    yes and they don't scale out on 4th street
     
    #245     Oct 24, 2006
  6. Snail oil again!

    How do you know this top is "The" final top, without another top coming soon?

    You think I believe you have never had a losing trade ever in your trading life. Do you believe this? :D

    I'm signing off now. Bye!

    PS: If you're so sure about the final top you say for "Fully Hedged", you really don't need any options or hedging in your trading at all.
     
    #246     Oct 24, 2006
  7. Could you elaborate on your second point pls? Like for example, which method do you then think is best suited for intraday trading, etc...?

    Thanks !


     
    #247     Oct 24, 2006
  8. http://www.elitetrader.com/vb/showthread.php?s=&postid=1238772

    We've already discussed the fact that scaling can outperform any backtested "optimal" exit, especially given rapidly changing market conditions. A backtest will always reveal an "optimal" exit that is by definition better than scaling out -- but in real time this doesn't play out.
     
    #248     Oct 24, 2006
  9. ...

    Keeping in line with my earlier post, here are some onf the categories you would have to look at:

    Holding Periods
    Intra-day
    Daily
    Weekly

    Markets
    Financials
    Curriencies
    Agriculture
    Interest Rate
    Metals

    Position Sizing

    Instruements
    Stocks
    Options
    Futures
    * whatever is tradeable and I've left out.

    Returns
    Weekly
    Monthly
    Yearly

    Best Regards,

    Jimmy
     
    #249     Oct 24, 2006
  10. You've had a discussion amongst the proponents of one methodology of trading.

    This in no way even remotely resembles a test using a scientific methodology such as I am proposing, with stringent critiera for both methodologies (doesn't have to be proprietary) and across as many broad markets and using multiclasses of financial instruements.

    Regards,

    JJ
     
    #250     Oct 24, 2006