A system with only a 30 percent win ratio will either win more or lose less by not scaling out. The percentage of wins is not relevant to whether it's better to scale out or not. The math works the same irrespective of that.
Not scaling out will outperform scaling out at any win percentage system except zero. At that level all trades will be stopped at the initial stop loss and the behaviors will have equal results.
Thank you Forrest for the kind words. I feel certain that there are more than just a few that share our viewpoint. Good to hear from you!
Funny, I posted mathematical proofs that this is incorrect, and you keep stating it like it's a fact. Oh well, hard to debate when only one side is bringing facts to the table. TNG
When you post mathematical proofs, please use the same parameters for both sides ie win percentage moving stops etc. --because both types of trading have access to that. Otherwise, you are comparing apples to oranges. When a proof is posted that has that involved, I will then analyze it.
Buy1Sell2,it appears you are entering into serious curvefitting territory,and I now see the ILL-Logic of your logic.Are you testing on out of sample data as well? Of course if you backtest for the optimal profit target one should liquidate 100% of the position for the asset/time frame tested...We dont need computers to tell us that.... B1S2,I am pretty dam sure you are NOT testing on a sampling period and then walking it foward on "out of sample data"..
Analysis from your example is as follows: Scaling out 100 trades 2pt loss target(It can be any amount) 90 winners times 10 equals 900 points (1 contract) 1 winner times 11 equals 11 pts (1contract) 109 losers times 2 equals -218 pts (1 contract) Total 693 pts No scale out 90 winners times 10 equals 1800 points (2 contracts all out) 10 losers times 2 equals -40 pts (2 contracts all out) Total 1760 pts The example you have provided in your previous post concerning probability is simply a proof of why 10 pts is a better target than 11 pts. That is all. It has nothing to do with scaling out or not scaling out. A person would choose the 90 percent target as the place to exit all positions. As you can see from the example provided, "All out" is much more profitable.