I was reading that Van Tharp was strongly against scaling out of a winning position. He says that doing this you actually cut your profits short. To me it looks like securing profits. I could never find out an exit point like I find a stop loss, it never worked for me, so the only way to take out profits is scaling out the position. Scaling out can be tweaked to maximize profits.
For me it is very important to move to BE asap, it provides psychological ease. Also when moving to BE I close part of position (half usually but now I am thinking to close 1/3 only). Another tweak I want to experiment is closing 1/4 when profits move at the same distance as SL. Thus if I open a position with 2% initial risk and I close 1/4th as I said and if the SL is then hit I would only lose 1%, without moving the SL at all.
So I see scaling out as a good thing, not a bad thing.
Anyone has an opinion on this?
For me it is very important to move to BE asap, it provides psychological ease. Also when moving to BE I close part of position (half usually but now I am thinking to close 1/3 only). Another tweak I want to experiment is closing 1/4 when profits move at the same distance as SL. Thus if I open a position with 2% initial risk and I close 1/4th as I said and if the SL is then hit I would only lose 1%, without moving the SL at all.
So I see scaling out as a good thing, not a bad thing.
Anyone has an opinion on this?
-soso