Disliked{quote} Hi, Trailing a stop in some way, i.e. bringing the stop up as the trade progresses favourably, clearly makes sense as you are both reducing initial risk and improving the current R:R of the trade. It's really a matter of balancing how much room you want/need to allow a trade to potentially go further with how much open profit you are prepared to give up. How you do that is again is largely a function of your trading style and your psyche. However, scaling out makes less sense to me. If you progressively scale out of a profitable position...Ignored
I more or less agree with everything you wrote. As you said, 'it's really a matter of balancing how much room you want/need to allow a trade to potentially go further with how much open profit you are prepared to give up' and I think that's where the trading strategy comes in. Some strategies are better suited to scale out, and others might be better with a TS or TP.
I especially appreciate the point you make in your second paragraph about it being mathematically disadvantageous to scale out. That absolutely can be true and makes me think I need to be more careful in my words... Its common knowledge in trading that you should take an early partial profit to lock in some gains, but I've been adamant on the forum about not doing that because of the point you make. On average that's probably the wrong move. Where I think scaling out makes sense is when the odds have changed, but momentum is still in your favor.
Self-sufficiency is the greatest of all wealth. - Epicurus
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