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On 8 Dec 2007 at 20:59, Alex Matulich wrote:
> >with all that said, i would ask if anyone has a simple example of an exit
> >for scaling out.
>
> You probably can't find it because it generally isn't a good thing to
> do. This was discussed on this list this past July under the heading
> "Bet sizing question: Scaling". My answer is here:
In that response you quoted Van Tharp:
> There is one kind of exit that is designed to get rid of losses,
> but it totally goes against the golden rule of trading of
> cut your losses short and let your profits run.
That "golden rule" applies ***ONLY*** if you are trading a trending market.
"Let your profits run" is a guaranteed way to LOSE in a reversing market. In
a market like that, scaling out makes a lot of sense.
You have to test the strategy in the market you intend to use it in. Don't
assume one strategy or one "golden rule" applies to all markets and all time
scales.
Gary
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