Scaling into and out of positions is a common practice traders use to increase their chances for success when taking multiple entries and exits on their trades. However, there are a few things traders typically overlook when it comes to scaling into and out of trades.
Usually, traders don’t follow a rule-based or thought out position sizing and risk management strategy. This unfortunately often leads to wrong interpretations of trade management opportunities and false risk management decisions.
Bad practice I – scaling out of trades
Most traders will probably have done this before: partially closing a trade where price has moved into your favor to realize some of the profits and also to take off some risk. Whereas this is a good decision when it’s backed by price analysis, most traders cut their profits too early. The fear of giving back unrealized profits dominates the thinking of many traders and they will