I have to say, I much prefer to go in with 5 contracts and get out with 5 contracts.That said, it's a tad early to form any kind of conclusion.
Started small and adding only when MY criteria for adding was met. What I'm absolutely aware of is that there wasn't an issue of over-trading. The multiple entries work fine for me as they kept me in tuned with the market throughout the session.
Notes on chart. All entries are LONG entries - all stop orders. Exits mostly on market orders.
My greatest accomplishment today: I didn't have to sneak out of bed after 2am (my time, and 2pm N.Y. time) to continue to watch the market. D was a good boy and went to bed himself, after I kissed him goodnight and gave him a rub.
I wonder how I'm going to manage in the long run: turning in at 5am, and getting up 2 hours later to make breakfast and see D off to work.
So far, caffeine has helped though I utterly hate the after-taste (I'm by default NOT a coffee person, not a liquor person, not a coke person - D's all of those) . Absolutely worse than cigarette. I'm going to have to start popping wake-up pills. And I'm not even sure that's legal here. Hmm....
13 comments:
Scaling is a fantastic way to manage risk, Jules. You can go all in, then scale out, or scale in and take all off, or some crazy mixture of the two.
Keep testing :)
Actually, MVW, I really had fun today! Why does it feel so wrong??? Please tell me that there are indeed traders out there who are not bored/boring and who actually are making a decent trading income.
I hate scaling, but it's just my personality. When I enter small and goes my way I hate it because it's not full size. Then I add and make myself nervous because it's bigger size and after initial move ready for retracement.
Yes, FX, i find scaling in challenging on intraday charts. That's why I'm going to continue to do more testing. It's not as intense as going in with full position though. Catch 22 situation.
That's a heck of a schedule Jules! It always amazes me when I hear the hour of the day that some people trade. It's a world wide game now...all hours of the day and night for traders. Pretty cool!
is that the new infinity's platform ?
better than ib's
No matter what angle I think of scaling, i just can't see any mathematical advantage. It would be devastating to me if I scale in and become doubly wrong just to cancel all the gains my first entry made. No matter what, the 2nd entry will always be worse than the 1st entry as the 1st entry was with a better price. If the 2nd entry position has a better probability, then why not enter everything on that spot instead? I just think it's a different way to spread out risk, but in the end, the total risk would just be the same regardless of scaling or not.
I guess if you can separate your mind to look at the 2nd entry as a total new trade worth taking with no influence from the 1st entry, then I agree with "scaling in", just that i would call it a separate trade.
Ed,
You've hit the nail squarely on the head :-)
As I was going over my trades again just moments ago, my focus was on those 2 trades where I have scaled in. It would indeed have been more profitable for me to just go in full size at the point where I added new contracts.
As a matter of fact, the 1st trade that called for scaling in was in the first place not entered on valid premise.
The 2nd was a misjudgment and a textbook example of the challenge daytraders face as far as scaling in (and OUT, for that matter) is concerned. Although at first glance there was a clean breakout, there were too many resistances on the higher timeframe that a short-term trader could have easily overlooked (mostly that's how traps come about). You can feel momentum waning but that would usually be AFTER you've added.
Like I said, it's tough. Fun, nonetheless :-)
And yes, one has to choose between low risk and high reward. Can't have the cake and eat it too :-)
By the way, Ed, hope you're feeling better? Still on juice diet? Do take care. God bless.
Hi TST,
yes, that's the AT platform. It's better than IB, definitely :-) Not perfect (or maybe it's just that I still haven't found out how to set stop loss to breakeven using bracket order LOL!), but good enough for me, for now :-)
Hey DT,
Yup, heck of a schedule. I officially sleep only 2 to 3 hours a day now. Lean and efficient - run on H2O, simple vegetables & nutella, and caffeine & nicotine. LOL!
Thanks Jules. I still have minor coughing (must be the swine flu!!!, but no big deal). Yeah I'm still juicing everyday as a natural nutritional supplement that I really need, and it's working miracles as my digestive system is regular now.
I think scaling in and out can work for those traders who enter in zones where it's difficult to achieve an optimal price but too risky to go all-in....that way you get a piece of the move regardless.
It's good for keeping your finger on the markets pulse as you're part of it (the market) for longer
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