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I usually treat scaling in and out as each separate trades so keep things simple. If I get in at $10 with 900 shares, then scale out 300 (trade 1) at $11, then another 300 at $12 (trade 2), and so on. |
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Well if something like that works for you that is great. However, whenever I have run a test of piecing out vs all out, the scaling out has never come out ahead. It always seemed that I would take less on the winners ( since scaling out lowers your average when compared to getting all out). Like your example here. Your average profit is 1.5 instead of 2 if you got all out at 12. But when stops occurred, it was for my full lot. Just doesnt make sense to me that I would be willing to take a full loss on my full lot, all the while taking less on my winners. Maybe it was just me though. Every trader has their own way.