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Scaling in

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Scaling in

I've been having some luck recently scaling into and out of positions. I use Todd's HMA 10 & 200, MACD indicators (or RSI, but mostly Todd's) and look for alignments between the M1, M5 and M30 charts, usually in the EUR/USD pair. I don't know why but I have a bias against the M15. It's likely irrational, but it exists. I will check the longer term charts for an overall bias when I sit down to trade as well. Once I see a trend becoming confirmed, I'll put on a stop order in the M5 timeframe above or below resistance or support, depending on which direction I'm seeing, with up to 60% of my desired position. Then I look to the M1 chart to see how I can trade the remaining 40% of the position on a shorter term basis using the same indicators with tighter stops. Sometimes this will be two trades of 20% each, most it's just the one 40% trade. The 60% piece is generally a good breakout find and generates the meat of position's profit, as if wrong it generally either never triggers or carries the momentum far enough to get the trailing stop loss into a lower risk than it was initially. The smalleer, shorter timeframe portions of the trade are basically scalping the way in. As they're smaller, with tighter stop losses, the overall losses are inherently limited.

Long way of saying I'm having some fun with this! Cheers!

Tue, 11/28/2017 - 5:53am

That sounds like a good strategy. Just in case it goes the other way.