atlus1432's  Instablog

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trader and Excel based software developer of risk management software
My company:
Fulcrum Shift Trading
My blog:
Fulcrum SHift Trading
  • Exiting a trade - All at once or scaling out of a winning position?? part 5 0 comments
    Apr 6, 2009 11:32 AM

    In the 5th installment of this of web tutorials series , we now explore what happens when a trader, who has initiated a trade with multiple contracts, makes the conscious decision to scale out of his or her winning position. The choice to sell all contracts at a single, pre-determined profit objective ,has been passed over in lieu of  attempting to turn a modest winning trade into a more substantial profit. However, as you will see, when attempting to "go for" more points your probability of success diminishes. For example, as traders its nice to think that every trade we initiate on (should it be a winning trade) will garner us 10,15, heck why not even 20 points each time, but as we all know, that's just not reality. As we ask more from the markets, the probability of reaching those loftier profit objectives diminishes, changing the entire dynamic when considering your best course of action for exiting a position. Wishing and hoping are a quick road to ruin in trading - its the discipline of applying a sound and tested methodology, whichever that may be, and combining it with sound risk management, calculated positions sizing,and the acceptance of the fact, that probability is constantly in play whether you chose to acknowledge it (probability) or not. The m3 Money Management Modeler addresses all 3 of those metrics in a way unlike no other platform currently available today, on a "leg by leg" analysis, modeling all three of the above mentioned dynamics.

    click the link below to enjoy the latest installment in the series

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