"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. Buy1Sell2

    Buy1Sell2

    No. You have not been paying any attention. When someone takes a trade, it should be let run to maturity, with full position period.
     
    #771     Apr 1, 2007
  2. taowave

    taowave

    Not period..just your opinion and no more than that
     
    #772     Apr 2, 2007
  3. But you've got to give him Obsession Points for carrying on this argument so so long.
     
    #773     Apr 2, 2007
  4. Buy1Sell2

    Buy1Sell2

    No, it is mathematical fact. By not scaling out. a trader will reap larger rewards than the trader who is scaling out.
     
    #774     Apr 3, 2007
  5. Buy1Sell2

    Buy1Sell2

    What I try to to do is pass on items that I have already learned. This is so that a newer trader may benefit from my experience free of charge. There is no argument here, only a statement of facts.
     
    #775     Apr 3, 2007
  6. Pure opinion/assertion based on a false premise - that is, that the extent of a move can be determined before a trade is put on. It is obvious to anyone who has actually traded the markets that it's impossible to know beforehand what the markets will do. It is also a mathematical fact that if a trader is always on the right side of the markets, he will make more money than a trader who is sometimes on the wrong side of the markets. The premise of this thread is about as useful as that.

    B1S2 was forced to claim that this knowledge of the future was the basis for his assertion. I am not going to search back through the thread to cite the post.

    There are plenty of systems that rely on scaling out in order to achieve their performance targets. These systems are used by the biggest trading companies on the planet. Trading in and out of a position is a common technique. To suggest that it is somehow 'wrong' is to suggest that it is possible to make the optimal decision in every single situation. Trading is all about understanding that this is impossible, and developing the discipline/technique to implement decisions which mechanically protect capital when the trader is wrong, and ensure profit when the outcome is in question.
     
    #776     Apr 3, 2007
  7. wave

    wave

    It is my belief that unless you have been fortunate enough to devise a trading system with precise mathematical and quantifiable rules, you will always succumb to scaling out. When you scale out, it is because you have not found the proper rules to keep you in a trade or position. Certain events should occur before starting or ending a trade or position and until those rules or events are solidified, you will have to resort to scaling out which I agree is inferior behavior as well. But without a decisive rule set, it is all most have to rely on to achieve profits.
     
    #777     Apr 3, 2007
  8. I'm amazed at how long this thread has been going on. There is nothing that can be proven, and the thread title is fallacious at best.

    However, apparently there is something amusing about it all.


    c
     
    #778     Apr 3, 2007
  9. I agree, although I would not use the word 'succumb'. If you have not developed a system with those precise rules, scaling out is optimal behaviour.

    It makes no sense to hold up an idealized model for trading behaviour and say 'If you don't do this, you are inferior'. This has no meaning other than to point out that there is a theoretically perfect way to act if one had advance knowledge of the future.
     
    #779     Apr 3, 2007
  10. GTS

    GTS

    Well said!
     
    #780     Apr 3, 2007