Scaling into positions .. Smart or silly?

[Jemook]

Hi TD,

I agree with all that you said. Let me master my % risk per trade method and then we can talk about scaling again soon

J

[AnotherBrian]

There's a EA called snowball you may have heard of.

It scales in, takes lots of small losses, when price gets rolling it makes a bundle. It's more of a manual EA, you have to pick the starting point.

I play with it on visual back test to watch what it does. If you catch a move at the right time you're golden. It's a good read. I don't think I'd play with this live though.


Snowball

https://sites.google.com/site/prof7bit/snowball

http://www.forexfactory.com/showthread.php?t=239717

[Radar]

Hey AnotherBrian,

There's a EA called snowball you may have heard of.

It scales in, takes lots of small losses, when price gets rolling it makes a bundle. It's more of a manual EA, you have to pick the starting point.

I play with it on visual back test to watch what it does. If you catch a move at the right time you're golden. It's a good read. I don't think I'd play with this live though.


Snowball

https://sites.google.com/site/prof7bit/snowball

http://www.forexfactory.com/showthread.php?t=239717

That's a nice little anti-grid EA... I might have another look at it, and hook it up with Jem's "How To Trade 10.X Like A Boss"

Another one along a similar vein is SnowRoller, which you can find here...

https://sites.google.com/site/marketformula/snowroller

FF thread... http://www.forexfactory.com/showthread.php?t=286352

Have fun!

Radar =8^)

[PerezTurner]

Scaling has importance. Without authentic scaling, accurate results can not be found. Thanks for sharing and helping to newbies.

ScaleForLess

[Captain Jack]

I prefer to call it "trade stacking"....When I start a progression, I place my "anchor trade(s)" near the beginning of the trade cycle. These will have a very tight stop...mostly mental, so as not to show my hand. The anchor trades are usually larger in size than the later added trades. Once the trade initiates and price moves in my direction, I do not scale in, I add additional trades. I have used a scale in script with pending orders when action is fast and trading multiple pairs, like news events, but in this case, each trade was a manually entered market order.

I will take profits at the sign of a retrace, bank the pips and wait for a new progression to begin the cycle over, as I have done with this pair.

What you are doing is similar to what I do, yet quite different. I believe you look to spread 1-2% of total risk across a spread trade pattern. What I do is to add individual trades, each with their own risk factors. There is a big difference there. While it may look like high risk to many, the risk of each added trade is already mitigated by the positive equity in the preceding trades. At times, with a large progression, I will close the older trades that are well in the money, while rolling into a new, replacement trade should the cycle look to continue. The progression depicted in the chart returned 500 pips, give or take 20, when it was closed. With a scale in, those would be fractional pips. With stacking, they are a true pip count as each stacked order is almost as large as the initial anchor trades and would be the equivalent of placing those individual trades on other pairs. I prefer to have a bunch or winners on one chart as opposed to having a bunch of winners, spread across many pair.

I've posted many examples of this in my threads, but each person needs to work with what is comfortable to them and their accounts.

Don't ask for numbers, ratios, %'s or any other formulas as to how I compute the trades as I don't use any, I just trade. When laying on additional trades, they come from S/R levels and the like...places where price pauses or retraces a bit before continuing on its way.

I've discussed several ways to protect the trades, like setting a hard stop above a retrace and locking in profit should you wish to hold the trades or just close them out and reload as I am doing here.

Since I don't auto-trade, I have no need to figure out the math to have an EA do this and I don't need to have money exposed 24hr a day to be profitable. Trade the London-NY sessions and look for 25-50 pip moves.... it really is all you need. BTW, I've got 2 trades started in the new progression as I type this and will build this position into the London session, looking to reverse it in the NY...

CJ

[McNish]

Thank you CJ, u added to my confidence.

Practically, it all depends on your confidence of the particular trade. How did you arrive at that trade? That's the key. Experience trading the markets, experience in that particular pair, technique, system, MM, .... what???
Weigh it on a scale of 1 to 10, know where you are on the scale, do accordingly.

So on a personal front, this is how i idealise.
fixed risk % on first trade based on sl pips. thus mine is 5% risk on a/c bal based on sl pips will determine my lot size. Stack 3 trades further, each is 2/5 th of first trade lot size and is min x pips away from from first trade and is at the next 3, either quarter, round or whole number, of the price. Same sl for all trades of that particular setup. Sl for stacks will also move as per sl of the main trade.
As soon as trade moves to 50% of IR(initial risk) in our favor, i.e 1:0.5, move sl to Be + ?

Then i like to start trailing depending on the market. But that above is minimum. For a good confident trade, i'll not start trail until i reach 150% of IR and leave sl at BE +. The when i reach 1:1.5 (150% of IR), i jump sl from BE + upto 50% of IR. Now i'm trailing at 100% of IR pips and i'll close this gap decreasingly. For every 25% jump of IR pips, trailing distance will decrease by 10% of IR. Thus at 1:4 RR, both the price and the sl will collide.

But that's just me. still i believe the first part of moving the initial sl to BE is pretty large in scope.

Cheers,

[Swingtraderkk]

Have to agree with captain jack and others.

When I stack, the new trade has to make sense in its own right, I use broken pivots or other SR lines with same stake size, but stochs or other oscillators in strong trends would work also.