67. Scale Out of Trades


 

One might assume that scaling out of trades is the same as scaling into trades and in a way?

They are, but getting out is different because you know how many contracts you have and it is important to preserve profits, maximize profits and minimize risk all at the same time. 

Scaling into trades mainly just has to be about staying close to the last price to set up an exit.

Go Fish Pro has 12 functions based on exiting positions versus 4 functions to enter a position. This ratio alone is how important exiting a position is.

Past performance is not necessarily indicative of future results.


We know we cannot ever buy the bottom or sell the top, so why try in our opinion. 

We are not smarter than you or the market, but what we are great at is following the math and models. 

The goal for every trade is to set up what we call a FREE TRADE

A Free Trade is when 1/2 or more of the position are exited, and there is a stop above the true average price. Meaning, you can't lose on the trade no matter what. You locked in profits and your protective stop is at or above your true average price.

Reach For Exits - 

The first objective in our opinion is to reach for exit prices and scale-out of a percentage of the total open position at each level. This is done automatically with Go Fish Pro Trade Manager App (GFP). 

The first function is to take the total number of contracts and when the average value of all of them is at or above the Dollar Exit Value, then exit X % percent. 

Delay the next exit X Seconds and do it again. 

The wait X seconds function allows the market to exit at even better profits.

Past performance is not necessarily indicative of future results.


Profit Target Tick Based Exits - 

The second exit is also very effective called Profit Target (ticks). This will send a resting limit order for a % percentage of open positions X ticks above your true average price. This function is a one time function unless you choose to continue exit. Then it will place the same order from the current price X ticks better, unless you choose to reduce this next exit by x ticks each time. 

Past performance is not necessarily indicative of future results.


The key to both of these exit functions is they are fully automated and require no thought process. 

Very easy to set up and allow the app to follow. You can change any of the settings while you are in a live trade and it will automatically adjust. 


Manual Hot Key Exits - 

A third method to exit is manually. Meaning you can place orders on NinjaTrader or using Go Fish Pro's exit buttons and Hot Keys. We often exit orders both these ways to lock in profits and set up a free trade. 

Past performance is not necessarily indicative of future results.


Past performance is not necessarily indicative of future results.

There are lots of options to choose from and we feel it is important to scale out of trades, and allow you account to make the bigger profits and reduce exposure by locking in profits. 

It is too risky in our opinion to try to make the big move without locking in profits to set up a a free trade and go for the money move.




Next -> More Trade Models 

68. Money Management Models



Futures, Options on Futures and Forex trading involves a substantial degree of risk of loss and is not suitable for all individuals. An investor could lose the entire investment or, in some cases, more than the initial investment. Past performance is not necessarily indicative of future results.