Scaling

I had a question to Friday's post. A guy wanted to know which of the recommended books on money management dealt with scaling in. I answered and then thought that the subject needed more information, so I'm posting on it.


Firstly, I don't scale in. At all. Apart from the fact that I am more short term, I don't want to worsen my trade location with a worse average price, larger stop loss and lower profit per contract.


The closest I come to scaling in is by "reloading". By this I mean that as I am scaling out and there is a proper re-entry picture, I'll take my position back to full if I had scaled out some. But the picture has to be as strong as entering a new position. I don't scale in because the market has gone my way. The math just doesn't work for me.


My initial entry will have a size - 25%, 50% 100% depending on the risk - how much it will cost for me to know I'm wrong. Keeping the risk per trade the same is important for me.


I've been playing with trying to put some sense in an algo that runs on Renko charts. A real challenge as Renkos have an invisible wick that hides possible stop hits and targets. So here's the Euro on a Renko chart with wicks so I can better analyse what is happening historically.