Hi everyone, I have a question regarding the scaling in or out of my trades.
On my trading plan I have 3 take profit levels, so lets say I place three 0.01 lot sized trades, and each TP level I close 1 trade.
I have the first level at 10 pips, the next one at 30, and the third at 50 pips, and my stop loss is at 25 pips.
If the trade goes well and my tp levels are hit, I win 90 pips, and if my stop loss is hit instead, I lose 25 pips x 3 trades = 75 pips. The problem is, im trying to grow a small trading account, and when I loose, I lose a lot more than I can afford.
Would it be better to scale in instead and add 1 more trade each take profit level?
Depends. From just a pnl standpoint and not a psychology standpoint, you could lose big too you don’t scale right. You could also give your trades less breathing room too if you start moving SL just to scale in.
World champion Andreas Unger said that in all his years of trading/testing he found leaving SL alone is what worked best for him.
You have to experiment and make notes. Like I always say to others, there are many unknowns with your questions. Test, test, test. Take lots of statistics and then decide for yourself. Doing it on demo or backtesting software will be the safest way to do it.
Oh one last thing, you said when you lose, you lose more than you can afford. Maybe you should trade smaller until you perfect the system. Maybe your current system works but because you’re sizing too big you are so emotional that you lose the big pictures. Trade small (or demo), get some stats, then slowly size up.
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Thank you very much for your reply !! It is very valuable.
Increase your capital, I understand that there is a certain goal to do something that no one can do, but let’s really look at the situation, you talk about getting into situations that you can’t afford. You shouldn’t play games like that…
Thank you a lot for all your answers. I’ve since made the decision to stick to only one trade, with a minimum of 1:1 RR and it’s given me a lot of better results than what I was doing before. Really appreciate your help.
Best regards.
That could work sometimes, not always.
You need to invest more.
Discipline is required in every trading strategy. Because trading is never a success without discipline. And in this case, you have to start the trading journey with a good investment.