Should I Scale Out Of Trades?
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- Опубликовано: 2 окт 2024
- This is an edited version of a Q&A session held via Periscope.
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keep it black and white , scaling is grey .... grey = confusion
I work a wide area when i enter a trade, I work a wide area when i exit a trade mainly cuz i suck as a one entry bracket order trader...but give me a wide palette and multiple brush strokes ill paint a masterrpiece on that chart....
I’m kind of glad this only has 10k views because only a few hundred people will utilize this information successfully
Really useful - I've looked at my own trades to see if scaling would have helped me. I came to the same conclusion as you for sure.
I don't really scale out but will instead just keep raising my sell stop orders as the market advances in order to lock in or maximize my profit and capture a larger part of the move. Have been flirting with the idea of scalping some and swinging the rest of my position in order to guarantee at least a partial profit on most trades, though.
There are many different ways of scaling out and scaling in. A right way to do it is not scaling out when you are losing. That is just not accepting your risk. You scale out when the price had hit your profit target into a squeeze. You have to pay yourself into the strength when it’s a long. You take half off or more and let the rest run. If you would have taken all off at profit target you are leaving potentially money on the table. You could even scale in if there is more stronger resistance overhead and the support holds strong. But scaling in should be done with lower and lower sharesize as the move develops and becomes established in overextended territory. Everyone is different but for me, i made more money holding on to runners and scaling out instead of going out full on profit targets.
"you are leaving potentially money on the table." Yes, this is true - but by scaling out you are leaving money (your own) on the table, at a level that you (presumably) defined as being likely to provide reasons to exit the position. So do you believe in scaling out only with highly skilled/prudent trade management? Curious to hear your thoughts on this
This is one of the very rare occasions i dont agree with tom, scaling helped me to get prfotiable and yes i do scale out of losers
I know this is an old comment. But can I ask why you scale out of losers? If you set your risk appropriately, and scale out before reaching your stop and then price moves and hits your TP you wouldn't have full size. That doesn't seem to make sense if your trading appropriate size and you have your risk set.
It could also be that people scale out of winning trades because they have too large a position on. Those same large positions delay scaling out of losing trades because the loss is too big.
one of my fav eye opening videos! awesome
Bang on
what about scale in?
Preach!
Great video, ive been going a lot of research lately into whether i should be scaling out or not, im currently scaling out of winners starting at 2R. Right now, i have a position at almost 10R, but i only have a tenth of my original size on. Not that holding full size to 10R on every trade makes sense but its somewhat painful seeing such a great trade and having hardly any size left because i closed 50% at 2R and closed 50% of remaining size at 3 other targets. This is somewhat of a data outlier from my statistics reaching such a high profit target so im happy to have any size left i suppose.
awesome video
Whats your thoughts on scaling in?
RAINMAKER once you are able to lock in your profit target, scaling in can be a powerful move. just make sure that your profit target can absorb the 1R loss of your additional position without bringing you back to Breakeven. EXAMPLE: my target of 3R is reached, so now I pile on an additional 1%-risk position. If it moves against me, I'm stopped out on it for a 1R loss but a net 2R profit due to my original position. On the other hand, if it moves favorably after I pile on, then so much the better.
@@johndoe5816 Hi John, I'm probably confused about this as I don't understand, if the validity of scaling in is predicated upon 'achieving' some profit target, isn't this the same redundant mindset Dante refers to when he says traders bring their stop to breakeven because it has pushed up a little? Could you think of every single 'scale in' / 'scale out' as individual trades? Sincerely curious. All the best wishes
@@mikebasketball11 you could definitely treat them as separate trades when it comes to scaling in. Not in scaling out, IMO. To be honest, I scale out ALWAYS (and rarely scale in). I am also of the mind that scaling in is, in effect, no different than placing a completely separate trade on the same instrument. However, if I do get a valid signal to enter again even though I'm already holding a position on the instrument, I will place an additional smaller (1-0.75% cap) position onto the existing trade to add tonnage. It is a rare occurrence for me but I will do it when the opportunity presents itself. Again, I structure my profit targeting to ensure that the potential loss of the "new" added position cannot possibly bring me into loss if it ends up failing. In order to do this, you'd have to have a rather significant profit on the first trade.
is he not recommending taking partials?
"im now going to scale out" lmao great ending
tom sounds like an amazing guy
lol... the only comment that Tom "liked"
thanks for posting
Well said!
as you said, depends on strategy, and you seem to be speaking more of swing or position trades that last a few days? However, for short term, there is successful London breakout method that risks 2% and scales out with quick move the rest to break even. Risk/ Reward is only 2 to 2.5 but due to hitting many target 1 and 2 plus the break even stops and trailing stops, it is a winner !!!
Awesome. I just did this the opposite of what most do then. I scaled out of the loss slightly (I have my reasons), but did not do so on the profit. Glad to hear this confirmed as sensible rather than common.
👍
I think scaling is ok, especially due to evolving R. When price moves in my direction, the R is getting worse and worse. Therefore, it makes sense to me to reduce the size as that goes on.
How much do you make per month trading
Very interesting concept, what do you think of scaling out of losing positions while holding winners until your profit target? Would that not be best of both worlds?
But you wouldn't know if it's a loser until it hits your full stop. If you scaled out before getting stopped and then hit your profit target you wouldn't have full size.
1:36 except we don’t know for sure, scaling out has always helped me holding on to my winner longer since Ive mitigated risk
it depends on R:R you're going for, eg. if you're +3R up then start scaling out of the position to pay yourself. It works for me but you should work on your own strategy.
I tried to understand this Trading thing but its quite hard, I think you should be into business to understand small things.