Do you scale out?

I like to take trades with a 1:2 risk reward ratio. I go in full size and I get out at my target.

Who uses partial scale outs ? Why? Is it better for your PnL in the long run?

for me it is because it solves the greed factor in my personality and I don't have to sit by only to watch the market move without me still in. So it helps my bottom line as I don't feel the need to re-enter or chase the market

I prefer to scale out of losing positions and scale into winning positions. I prefer not to do the opposite.

It's a good question NoLogic and the right answer can only be determined (in my opinion) by doing a fairly complicated "what if" analysis of your historic trades against the price movements that occurred after you closed out at your target. i.e. Where did the prices go after you closed your position? If they moved another (say) 5 points in the same direction 65% of the time and the other 35% of the time they retraced 5 points and you used those 2 values as your second/final scale out or stop then you would be better off scaling. The only way you can tell if scaling is better is to analyze your historic trades and see if they would have produced more profits with your strategy.

quote:

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Originally posted by pt_emini

I prefer to scale out of losing positions and scale into winning positions. I prefer not to do the opposite.

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I never exit a position at a loss unless my stop is hit. Since I have stuck to that regimen, my trading results have improved for two reasons.

1. I am not trying to predict if the market is strong or weak. I just let the stops work it out.
2. It means I'm a little more careful on my entry.

I allow myself to exit or reduce positions at a profit even ahead of my target - but not at a loss.