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All in all out vs. scaling in and out
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View Poll Results: All in all out or scale in and out?
All in, all out 79 33.05%
All in, scale out 103 43.10%
Scale in, scale out 57 23.85%
Voters: 239. You may not vote on this poll

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All in all out vs. scaling in and out

  #81 (permalink)
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xelaar View Post
If you treat them as separate trades - then there is no even reasons to discuss it. Trade as per your plan.

However most long term strategies work exclusively with scale-in, as they require gradual positioning into the market.

It can be very beneficial for swing traders as well.

Most retail people in futures though are scalpers so it does not apply to them.

Let me ask you few questions. When you answer them to yourself you should see my point.
Suppose you have one great setup, which includes scaling (in or out or what ever). Let decide for this exercise on scaling in one contract. Let suppose it makes you 10K per month.
Q1: Is it possible that one of the setups makes you consistently 20K and another loses 10K?
Q2: How would you know the answer to Q1?
Q3: If this is the case and you knew it, would you still trade the losing setup?

p.s.
I know that in your case it can not happened. Its just a hypothetical exercise.

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  #82 (permalink)
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baruchs View Post
Let me ask you few questions. When you answer them to yourself you should see my point.
Suppose you have one great setup, which includes scaling (in or out or what ever). Let decide for this exercise on scaling in one contract. Let suppose it makes you 10K per month.
Q1: Is it possible that one of the setups makes you consistently 20K and another loses 10K?
Q2: How would you know the answer to Q1?
Q3: If this is the case and you knew it, would you still trade the losing setup?

p.s.
I know that in your case it can not happened. Its just a hypothetical exercise.

I think you only listen to yourself.

Trade to live. Not live to trade.
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  #83 (permalink)
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ratfink View Post
When pro's do it for the reasons I mentioned in my earlier post they are also frequently up-scaling time-frames, i.e. what was a scalp has become a comfortable day-trade, or a day-trade has become a comfortable overnight hold or longer term swing.

This is an interesting point and may be why scaling in with pure day trading isn't commonly done. There may just not be enough price structure through the course of a day to scale in unless you have a strong trend day. However if you are swing trading, then what may initially start out as a day trade may turn into a swing trade depending on how the market structure develops.

With that said, there are certainly pure day traders who scale in, but im guessing they only do it on trend days. If not, I just can't see how the maths works out.

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  #84 (permalink)
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DarkPoolTrading View Post
This is an interesting point and may be why scaling in with pure day trading isn't commonly done. There may just not be enough price structure through the course of a day to scale in unless you have a strong trend day. However if you are swing trading, then what may initially start out as a day trade may turn into a swing trade depending on how the market structure develops.

With that said, there are certainly pure day traders who scale in, but im guessing they only do it on trend days. If not, I just can't see how the maths works out.

Yes, exactly. For example I see it most often now when the 6E algos trail using the same extension anchor to larger target, some will have taken profits and some will have held a truckload on. Watching an ES/Dax intraday squeeze is still a thing of beauty though too. One day, ha.

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  #85 (permalink)
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Interesting thread revived thank you guys!
It is always a great refresher.

I have a question for those trading "all in /scale out" as it seems the mostly voted method on the poll:
1. do you have actual statistics that you can share on probability of success reaching your target 1 and your target 2?
2. do you have actual statistics that you can share on how far your target 2 ends up being compared to target 1 and versus stop distance (on average)?

I am thinking for example, (for sake of simplicity) if you take 2 contracts long on the ES and set the following:
1. initial stop -2 points on both contracts
2. first target +2 points on one contract
3. second target +4 points on the second contract

Let's say also, that as soon as you reach first target you also place a break-even stop on the remaining contract.

In that case, the possible outcomes for the above trade are three:
1. trade works against you from the beginning, you get stopped out on both contracts for a loss of -2*2 = -4 points
2. price reaches first target, you gain 2 points on one contract and then it reverses back and hit your break-even stop so in the end you gain only 2 points
3. best case scenario, price hits your first target and you pocket 2 points on first contract, then price continues higher, hits your second target and gain another 4 points for a total of 6 points gained.

If we are to assign a probability of success to each outcome, how would the distribution look like if you have a 60% winning probability strategy let's say?

Would you get this by any chance?
40% chance you get stopped -> -4 points
40% chance first target is hit -> +2 points
20% chance second target is hit -> +6 points

If yes, then expectancy of the trade is 0.4 points per trade, right?

On the other hand, if I also have a 60% winning probability, and I use the same stop and target on both my contracts, ie -2pts and +2 pts per contract.

The possible outcomes would only be two this time:
1. 40% chance to get stopped out -> -4 points
2. 60% chance to hit target -> +4 points
Expectancy of that trade would be 0.8 points per trade, right?

So to have at least the same expectancy on both setups, "all in / scale out" and "all in / all out" I would have to modify my target 2, or increase the probability of hitting target 2; right?

I hope I am not too far off but please correct me if wrong, I am trying to learn and understand here.
If I increase target 2; making it wider by 2 more points let's say, then the probability of hitting it is also reduced, right? and so is the expectancy...
How do you guys go about proving that scaling out is more efficient than an all out approach if you are to apply strictly the same strategy and methodology for both cases?

Thanks in advance, and sorry for this long comment.
Eager to read your explanations.

Regards
Fadi

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  #86 (permalink)
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Fadi, you are talking about scalping here. Scaling is not beneficial for scalping. If you look for high probability zones and try to enter there with a small stop, trying to capture a swing, you will most likely want to scale something out. Its not statistically correct, but definetely reduces drawdowns and improves one's psyche. Stats wise the best is scale in all out. But depends on strategy too. Thus said good strategy should look to capitalize on good moves. AFAIK pros don't trade 1:1 RR, they look to get on the move even if it takes several tries.

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  #87 (permalink)
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All in, scale out

I am a all in, scale out guy. What i have observed that as time passes by, the probability of my trade keeps on decreasing. So i enter with my whole position and keep scaling out if the trade does not moves in my favour within specific time period.

This helps me to win big when i win and lose small when i lose.

Thanks and Regards.
Phantom.

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  #88 (permalink)
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all in, all out - I don't want to give the market a chance to ruin my trades, after all. From a day-timeframe standpoint, I agree with the above post about there not being sufficient market structure to support scaling the overwhelming majority of the time, especially since my targets are much smaller than say, a swing/position trader whose positions are measured in days, not minutes/hours.

Adding to positions just increased my risk exposure, and I usually had to do it at bad prices hoping the market would continue it's intraday trend a bit longer - in effect, I was stuck forecasting the future beyond what I'm capable of reasonably forecasting. I prefer to have higher confidence in my trades than that!

Given the volatility and global dynamics in modern markets, where even the most unlikely thing that comes out of nowhere can change price movement in an instant, managing risk and ensuring profits are taken at their best full potential become paramount to me.

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  #89 (permalink)
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scaling in/out

I believe there is a lack of context with a lot these posts concerning scaling in/out or all in/out methodology.....who says you cant you use a combination? why do all trades have to be one or the other?......the market is not black and white....why use a black and white approach?

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  #90 (permalink)
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Phantom View Post
I am a all in, scale out guy. What i have observed that as time passes by, the probability of my trade keeps on decreasing. So i enter with my whole position and keep scaling out if the trade does not moves in my favour within specific time period.

This helps me to win big when i win and lose small when i lose.

Thanks and Regards.
Phantom.

Oddly enough, my reading of the POP revealed exactly the opposite in terms of how he entered.

Perhaps you could elaborate on how you win big if you are scaling out and how you lose small if you are all in. In theory I can see a way but is like to learn from someone doing it every day.

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