Mjt ---- I might suggest you reread Tharp's excerpt and then test his proposition yourself. I've run several dozen 500-1000 trade simulations on the S&P over many years and in each one Tharp's position is proven correct, often by a big margin. As to whether markets trend more or chop more ----- that's in the eye of the beholder, but I'll put my faith in the bedrock of the long-term probabilities as measured by simulations. Data is virtually infinite, but you don't need to test infinite amounts of data to draw a reasonable mathetmatical conclusion, just enough to account for a very wide margin of standard deviation. And you misinterpret ---- scaling out of positions is not *wrong* (it may be psychologically very right!)----- but I think if you put it to the test you will find that it is simply not mathematically optimal over an extended series of trades.