the first is a accumulated stop loss which stops you out when the entire trade (initial big position plus all scaled in positions) are at 0 (brake even. no profit no loss)
which is at the gold trade right now around 1321 and with that position below the newest support line.
with tgis way you lock into profit after a big move and have absolutely no risk of loosing amymore. it is the “easiest way” since you dont need to manage much anymore and you give your trade enough space to breath. it is the most profitable way of scaling in since you participate in every move in your direction by 100%.
the second way is a much harder way but with way less risk if managed well.
i havent heard of it anywhere or read of it anywhere i figured it out by myself so i named it “grid in/grid out” scaling.
you scale in exactly the same way like i did in the gold trade. but with each sucessfull step of scaling in (after the price continued your direction) you put the stop loss of every scale in position to brake even. this way you get scaled in on upmoves and scaled out on downmoves. if you get scaled out by a downmove you put new scale in orders at exactly the same places you got scaled out and with that participate again on upmoves. the only cost you have on tgis system is spread/commition and time.
the initoal first position (the big one) always stays in plus (below a support level that should not get broken preferably) and even if your trade goes against you, you still have the plus of the first and biggest position.
if the trade goes against you a bit and resumes its initial trend then you got scaled out and scaled in again at the same points. you did not loose even 1 pip but a bit of spreads and positions.
the problem with this system thou is that you have to monitor it constantly to stick to the scaling in/scaling out rules. and that you at high volatility times are not able to scale in at the same points where you have been scaled out before.
i have not the time and nerves to constantly monitor the price therefore i stick to the first option.
edit: i have to add that i never put any stop losses anymore after a trade is in bigger profit. for this trade to go into minus it would take a very strong move upon very big news releases (none in sight right now) or several big 4 hour candle moves against your direction to be in minus. several 4 hours moves give you more then enough time to close your trade manually evem before it hits a immagimed stop loss.
Thank you for your detailed reply Turbonero.I practiced scaling in on my demo account and it worked really well but I need to get it going on my real account. Most successful traders I read about say that scaling into trades at swing points when most others are cutting the trades is what has made them big profits. I see you do this.
yes its the scaling in that makes the biggest profits. its the practice of exploiting your correct trading idea to the fullest and make the biggest out if it. but it aswell is dangerous as it can turn a profitable trade more easier into a 0 trade.
therefore never scale in more then 50% of your initial position. a good scaling in looks like a pyramide. the biggest position is at the bottom (first position) serving as the foundation of the trade, the longer your trade lasts the smaller the new positions should be.
and at some point you sell “the building” before it collapses under its own weight.
scaling in on intraday trades is very dangerous, scaling in should be done only in trades which last longer (several days/weeks/months)
Here, I don’t agree at all; nor, I’m sure, would [U]many[/U] (probably even “most”) people who make their livings through intraday trading.
With many of my set-ups, it’s routine to scale in to positions that move into profit.
Precisely [I]because[/I] of the good sense and logic in your other comments above, it’s often an intrinsic and important part of how we make our livings. It can be a way of reducing risk and increasing profit.
I’m just mentioning it, since you brought up the subject, Turbo - because I don’t think you’re an intraday trader, yourself, at all?
youre right Lexy; i rarely trade intraday. only when i see very strong opportunities (4-5 times a month) to take easy 200-300 pips in short time (but those trades are of fast nature and dont get posted in this thread because of theor quick decitions). in those trade i stay away from scaling in because of the volatility and the easily shifting momentum.
i, aswell, just like everyone here, when i started trading, started trading intraday and tried scalping etc. the regular way everyone goes in learning; learning all in order to see whats best.
when i was in my intraday trading time i tried scaling in. more often then not it did not enchanche my gain but made my trades more risky and the probability of a sucessfull trade outcone lower.
but you are right. i dont trade intraday since quite a while (in the way of solely looking for intraday trades) and the difference of knowledge back then and today is a big one. so maybe if i tried intraday more frequently, again after few years of not regurarly intraday trading, i maybe could change my mind on scaling into trades on a intraday level.
but right now, from my old experience, intraday scaling in is dangerous because of volatility. <- or to say it this way; more dangerous then scaling in on trades that last longer then inttraday.
This is entirely my view/experience as well - that is, if scaling-in means adding to already winning positions.
As a day trader my profit targets are generally in the order of 10-40 pips per trade, on average around 25 pips. But a reaction to a single statement from a prominent person can easily achieve a 30-40 pip reversal at any time without changing the underlying move in any way. This is somewhat irrelevant to a long term trader but life and death to a short term trade. And if I [I]were [/I]to scale-in, at which point would I do so? after 10 or 15 or 20 pips? This means increasing risk of sudden loss combined with a rather puny advantage of a few extra pips on the add-on positions.
On the other hand, I do agree with the idea of starting with a big position with tight stops and scaling out as the trade progesses. On the whóle I believe it is easier to pick a 10-pip move with 10 lots than a 100-pip move with 1 lot for the same end result. But this [I]really does [/I]require accurate entry levels…
Just goes to prove there is no free lunch in risk/reward…however the glove fits, wear it.
net profit of stradle/strangle trade on dow jones = +310 points
after several months of no movement the dow decided to go down and as we putted up a straddle/strangle trade 2 weeks ago on the trading range we did not care where the dow is going or when it is moving. now after 2 weeks of not caring, not looking, not thinking, not working, not putting any effort in -=not risking anything=- …= we have a profit of 310 points.
Hi TURBONero your chart red line says1297.84 and the blue line is 1304.04 what are those levels?
Are you waiting for price to hit there and then going long or are you in the trade? And sorry if Im being a noob but what makes you pick that price as your entry and target as your exit?
i am sorry for my late reply i am very bussy lately and barely manage to come to the forum.
at the blue line you go long. its the trade trigger. you can go long immediately when price touches the line or you wait for a confirmation (pinbar or engoulfind around that blue line)
the red line is the stop loss. i always post if its a long or short trade but for orientation if the stop loss is below the blue line its a long trade if its above the blue line its a short trade.
where those lines are set is my personal analysis of 70% fundamental, 20% technical and 10% sentiment. and the lines are the points of highest probability that goes into a traders advantage.
in the gold trade you quoted i changed the entree and stop loss to 1302 and 1295 afterwards but i had no time to create a new chart so i only putted the new numbers into the same post.
