scaling in/scaling out - how do you do it?

hi,
just a question on how people manage their trades in action;
1. do you scale into the trade once it starts going in your favor, if so at what point do you add, and how do you take the 2% maxim into account,

or

2. do you take money off the table as the trade hits profit targets along the way, if so, are they pivot point related, fibonacci levels etc, and again do you adhere to the 2% of trading account risked on any given trade, and if so how do you incorporate that.

im sure everyone has their own take on it and ive just interested in how and when people decide to take money off the table.

cheers
craig

It depends on the system you use - win to loss, r:r and so on. With a system that gives me 5-10 trades per day 2% is a bit high for me - 1.5% sounds more reasonable.

About tping, it's also a subjective matter. But, personally I was first inclined to use a 1:1 r:r as I thought that a good system with good application will bring you profit because of the higher probability and more than even win to loss. However, on short tfs like 5m it's pretty difficult to get a significant advantage in win to loss because of the spread + volatility. For example if you use an ma and indicator based system to catch the start of a wave you need to screen it very well by using additional tfs and possibly higher period indicators to confirm or else there will be too many fake entries and your profit will be negligable if any. As a result, my new preffered method is to use a small set sl as I would with a standard 1:1 trade but no set tp. I'll let the whole move run - which if the system is good and uses anough confirmations will be on average greater than the sl, and thus profit even if I just get an even win to loss. There are different ways I'll tp - one is using a trailing stop, it ussualy allows the price some reasonably sized room to fluctuate and is twice larger then my enitial sl in my case. Second is simply manual and discretionary, this I will ussualy use at the beginning when price moved just a little bit into profit and it looks like it starts reversing. This is pure discretion of course, but sometimes you enter a trade and you're not entirely certain even though everything system wise pretty much confirmed it (it's ussualy a bad idea to enter when you have doubt about the trade, but occasionaly happens of course). So in this case I'll jump out with that pip or two and be happy with it. Intuition counts. Third is simply letting the move develop and then walking out on the first candle (on your main tf) that turns against you - without waiting for it to hit the trailing stop, this is partially discretionary. At the end, sometimes this will allow you to catch massive moves that will make up for many losses and win the day on average even if despite all the strict system rules and confirmations you still only manage a close to even win to loss. Other people also use partial tps along the way, like say take half and let the rest run, but I personally don't do that plus the motive for using it for short term trades that you monitor live is lesser I think than for longer term trades and it's less comfortable to mess with it.

These are just ideas for you, best thing is to test things and see how they work out for you until you feel comfortable with it and have reasonable faith in being able to produce reasonable profit consistantly in the long run. Good luck.

thank you. you've got some good ideas i hadnt thought about.