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IDEAS FOR ADDING POSITION (Scale in ) & (SCALE OUT)

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  #1  
Old 29th August 2016, 12:41 PM
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Arrow IDEAS FOR ADDING POSITION (Scale in ) & (SCALE OUT)

Hi Friends pls Give your Valuble Ideas & suggestions For Adding position to a Winning Trade

(base idea)
I am Trend follower to capture most of the swings please help me to find out.....

My plan terms include on (P.Sizing) are........

1.) Re-entry
2.) Re-exit
3.) Re-entry stop loss
4.) Whole exit


Please Advise If Any Mistakes in Terms (Add or Remove)


ANTI-MARTINGLE position sizing strategies work
-Dr.K Van Tharp

PYRAMIDING: Playing with the Market's Money
-Ed Sey Kota


I Understand this Theory's but I don't have Strategie........

THANKYOU


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  #2  
Old 29th August 2016, 10:50 PM
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Default Re: IDEAS FOR ADDING POSITION (Scale in ) & (SCALE OUT)

Quote:
Originally Posted by TRADERSM View Post
Hi Friends pls Give your Valuble Ideas & suggestions For Adding position to a Winning Trade

(base idea)
I am Trend follower to capture most of the swings please help me to find out.....

My plan terms include on (P.Sizing) are........

1.) Re-entry
2.) Re-exit
3.) Re-entry stop loss
4.) Whole exit


Please Advise If Any Mistakes in Terms (Add or Remove)


ANTI-MARTINGLE position sizing strategies work
-Dr.K Van Tharp

PYRAMIDING: Playing with the Market's Money
-Ed Sey Kota


I Understand this Theory's but I don't have Strategie........

THANKYOU
There are 55 views no response. if anything wrong with these????

Mr.smart_trade And all seniors please give your valuable suggestions & ideas
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  #3  
Old 29th August 2016, 10:58 PM
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Default Re: IDEAS FOR ADDING POSITION (Scale in ) & (SCALE OUT)

Check this reply by madank,may be useful to you-

Quote:
Originally Posted by madank View Post
Folks,

Its been a long time since I posted in TJ and thought of sharing something. There was a question that always comes into any trader’s mind – All out or scaling out is better as an exit strategy. Was going through some old emails and found this one. This conversation happened between me and another trader when we both were trading emini S&P back in 2007. It was an email conversation in a group and bear with me for this long post !!

***********************
Jonathan: Hey Madan – According to you, scaling out is better than all out as an exit strategy?

Madan: If you scale out, you really have multiple trading systems that happen to have a common entry point. Since each exit would have a different risk/reward ratio, you should evaluate each of them separately.

You certainly can scale out, just don't evaluate it as one system. It's not.

Richard :
That's an interesting way to look at it. I'm going to have to think about that.

However, I don't agree that multiple exits are separate systems. The all-in, scale out methodology isn't about being right or wrong - it's designed to deal with the fact that the outcome is uncertain. The method can be evaluated in total by looking at the frequency of each of the outcomes: max loss, first target only hit, first and second target hit, etc.

Madan: Lemme put it in a different way then…For example, on a momentum play with 3 contracts, having two quick targets makes sense because the play is a fast propulsion play on a breakout. With the third contract as a runner, bringing the stop up to breakeven makes very little sense to me. To be going after runners, you are entering a trend trade of the Donchian breakout variety(for eg, which requires much larger stops in order to ensure that you catch the trend!

As I have the ability to backtest most of the trading ideas using automated strategy testing, the obvious back testing approach is to investigate the parameters of the quick target trades separately from the runner trade. It becomes clear that the optimizations are different for the runner than from the quick target part of the trades. I am not saying that scaling out method is not profitable, but I am suggesting that splitting the trade into its two separate components may make more sense, and possibly lead to greater profits

Jonathan: Agreed Madan. Nothing is right or wrong. It is just a trader’s comfort level with the exit management.

Madan: Jonathan - When you look at trading strategies/systems empirically you see that

(1) scaling out smooths out the equity curve, it does not necessarily make more net profit

(2) holding a full position for a winner and keeping the initial large stop can produce large net profit, but it requires a very strong "psychological constitution."

Think about, most trend following systems are 40% profitable trades, 60% losers, with a profit factor of 1.6+ That means statistically, you have to be able to stick with the system or strategy through 10-15 repeated stop outs to get those1-2 runners. If you fail just one time to execute on a trade setup and that one would have been one of your runners, you are setup for an even worse draw-down.

Richard: Well, here is the link from Van tharp’s website (some link about why scaling out is not better)..Apparently, Van says scaling out gives more mental satisfaction than financial sense.

Madan: I believe that both Tharp and Link make the same argument regarding scaling out, but they also make the point that the trade entry is not nearly as important and the exit. They tend to focus on strategies that have a defined risk, and a defined target or specific exit that they can back test to some degree. Take for example the opening gap trade. The entry is somewhat undefined, but the exit is not. If you can back test an opening gap strategy with a defined probability of the gap closing, then Tharp is right, scaling out will reduce your profits without reducing or losses.

With few exceptions, most of the strategies seem to be focused in the entry, with an unknown target. In my opinion, it's the exact opposite of what Tharp recommends in his books (if I remember correctly, it been a few years since I read it), and it would make sense why he would recommend against scaling out.

I am also writing a strategy that is entry focused with unknown targets and optionally scales out. I have found that the part of the position that is scaled out needs a separate exit strategy rather then just a fixed target. Otherwise, the additional risk of that additional contract does not pay for itself when you are stopped with a full position. So in fact, it is two separate strategies with a common entry. While scaling out reduces the strategy max profits, it also reduces the draw downs, which allows me to trade more contracts.

I think the choice may be summed up as:

- If your strategy is focused on the entry, with unknown targets, then scaling out makes sense. It will reduce your draw down (and your max profits), but allows you to increase the number of contracts you can trade.

- If your strategy is focused on reaching a specific exit, and the entry is less important, scaling out does not make sense. It will reduce your profits and increase your draw downs, requiring you to reduce the number of contracts you trade.

I think it's that simple.

*****************************
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  #4  
Old 29th August 2016, 11:01 PM
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Default Re: IDEAS FOR ADDING POSITION (Scale in ) & (SCALE OUT)

Quote:
Originally Posted by TRADERSM View Post
There are 55 views no response. if anything wrong with these????

Mr.smart_trade And all seniors please give your valuable suggestions & ideas
Extreme Bold Text by you may be considered you as arrogant person,thus no reply.
Pls use small fonts.
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Old 30th August 2016, 12:59 PM
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Default Re: IDEAS FOR ADDING POSITION (Scale in ) & (SCALE OUT)

Thankyou bhai............please post more like these
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Old 30th August 2016, 11:18 PM
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Default Re: IDEAS FOR ADDING POSITION (Scale in ) & (SCALE OUT)

Quote:
Originally Posted by TRADERSM View Post
Thankyou bhai............please post more like these
Here you go-

Quote:
Originally Posted by ashes View Post
We all do intraday trading (almost 90 % among us) , because this is shortest way to earn from stock market in quick matter.

But how many among us earns in Intraday trading on daily basis , most of the times at the end of the we have only earned some hopes that oh i made this mistake else i would have been in profits today.

And one day hopes also die bcoz capital vanishes and we realize that now only 20 % of original capital has left.

Why Intraday trader looses

Many times bcoz of greed , once we have entered in any position and it went into profit then also we looses bcoz of sudden volatility in market , then we think we should have used trailing stoploss . and will implement it from tomorrow.

Next day we use trailing stoploss and stock after hitting our trailing stoploss goes up by 5 % , then again we think ohhhhhhhh god . What should i do.

So what does matter most in Intraday trading is identification of correct Target. Since Intraday trading involves so many factors , like stock technicals , nifty / market trend , global cues etc etc.. , its not always possible to trace every factor with accuracy. and we losses again .......................



Try this concept for one week

Set target of 1 % and stoploss at 1 %

Always enter if u are 90 % or more % sure of trend


Power of 1%


Most of traders do not understand value of 1% if you can book profit at 1% with good accuracy then you can do wonders .

Just explore power of 1% with example

Mr. X Started trading with 25,000/-and his broker gives him 5 times intraday limit so he can trade with limit of 1 lac in intraday. Mr. X decides that he will trade max 2 stocks at any given point of time so he divided by his limit by 2 and started trading . he buys or sell stock worth rs.50,000/-at a time..

Mr. X always trade with 1 % stop loss and book profit at 1% target it means that if target hits then he earns 1% of Rs.50,000/- i.e. RS. 500 less RS. 50 (Brokerage and another expenses) = 450 .

If stop loss hits in any trade then Mr. X looses RS. 500 + RS. 50 = 550 , SO if he trade is profitable then he earns RS. 450 and if trade is unsuccessful then he looses RS. 550 .

Assuming 20 trading days in a month , we try to find out how much he earn or looses at end of the month , let try different possibilities based on his accuracy. We assume that every day he trades in 4 stocks , so in a month he made trades in 20 * 4 = 80 .



1) If he trades with 80 % accuracy then 64 profitable trade and 16 loosing trades.

a) What he earned :

64 * 450 = 28,800 (After adjusting brokerage of RS. 50 per trade)

b) What he lost

16 * 550 = 8,800 (including brokerage)

Net Profit=28,800-8,800=20,000/- i.e. 100 % times of his capital RS. 20,000



2) If he trades with 70 % accuracy then 56 profitable trade and 24 loosing trades.

a) What he earned :

56 * 450 = 25,200 (After adjusting brokerage of RS. 50 per trade)

b) What he lost

24 * 550 = 13,200 (including brokerage)

Net Profit=25,200-13,200=12,000/- i.e. 60 % times of his capital RS. 20,000



If you think trading with 80 % accuracy is bit tough then even with 70 % accuracy, one can easily earn 60 % of his capital.


If once can trade with even 60 % accuracy then he will earn some thing , or say atleast he won't loose . and if a trader can not trade with even 60 % accuracy then he must left trading
Pls go through whole thread.When I was new in trading I never got to read such detailed trading ideas.

http://www.traderji.com/day-trading/...y-trading.html

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