Wednesday 5/2/2007 ES Futures
I knew the image quality would not be the best. But by clicking the chart to open full size I did not think it was too bad. Let me know if I should break the charts into multiple images to show more detail.
Well... I had a hard time getting long today. I should not have. There were three to four entry signals on the way up. But the market was strong enough that the pull backs were mostly non-existent. My preference is to have a descent pull back to go with the signal.
So I watched too much opportunity go by before realizing that I'd have to "jump on" and "Trust" one of the signals would not have a retracement deep enough to stop me out.
My default stop is 2 points and my initial target for the first half is 2 points. I have to be careful to let my profits run or when mistakes are made I'm risking getting a full stop out on my complete position. I'm struggling trying to decide 2 things:
- Should I scaling into a position? Putting partial positions on at consecutive entry signals. The risk would be that the market does not give a second entry signal.
- Could I make more profits but not scaling out of my position? The risk here is that mistakes are more costly because you start with a full position.
Trade Well, Trade Wise
John
2 comments:
Should I scaling into a position? Putting partial positions on at consecutive entry signals. The risk would be that the market does not give a second entry signal.
I always scale into my positions. While the risk of market not giving the signal is there, I believe one has to be quick enough to respond to them. I'd advise having 500 tick charts, 3 min and 10 mins. Just to get a bigger picture. Scaling in is always better, unless you're a scalper ofc or trade with that mentality.
Could I make more profits but not scaling out of my position? The risk here is that mistakes are more costly because you start with a full position.
While it will cost you commissions I think scaling in out is the best by trailing stop losses. Starting with a full position might be dangerous as the market may swing away from you every now and then and reaction time can at times be meager by the best of us.
I believe you should always average up and scale in and out with trailing stops to protect profits/losses, builds discipline.
Thanks again for the input Yaser,
I currently use a 1 minute and a 5 minute chart. In addition, I also have a 233 Tick and a 1000 Volume as well for "different" looks at price action. The 1 minute is where my "heads-up" signals are generated and I like the 1000 Volume for entry selection.
I have been very interested in scaling into a position, but just have not figured out "my style" yet. I may be turning into more of a scalper that tries to let part of the position run for more profits when offered. Still tweaking everything and trying to figure out what works best for me.
My original thinking was to scale in at "the next" entry signal. All I have seen is someone that scales into additional contracts at additional entry signals that could be 1 - 2 points away from the first entry.
I see the risk here being that if the market turns you could lose on the scaled-in contracts and end up giving back more profits than if the no contracts were added to the initial position. The benefit is a much bigger win if the market continues in your favor.
I may be crazy, but I'm starting to wonder if I should scale in after the market shows an indication that it will continue in my favor. This would be closer in time and price to the original entry. As price comes back to or near my entry position I'd add to the position if the trade still "looks" good.
The market could still go against me after I have added contracts, but chances are better that I'd be adding to winners and getting stopped out on smaller positions.
I definitely like that thought of that right now. I think I do pretty good when I trust my signals. But when I decide for the market what "it should do next," I end up taking additional trades and will eventually catch an entry that decideds to go against me quickly. Then it does hurt to start with the "full position" size on the initial entry.
When I tried scaling into positions in the past, I seemed to kill too many small profitable trades and turn them into small losers or break even trades when they would have been small winners at least. On a day like today, I should have cleaned up scaling by scaling in.
Thanks again,
John
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