Monday, 13 June 2011

More Exits

I exit in one of two ways: All Out or Scale Out.

Which one I use depends upon the context of the trade and the risk that I see. For example, If I am seeing a trending market with lots of pullbacks, I will try and trade every trough and peak- All Out. If I put a trade on leaning against a Market profile VAL or VAH with a view to going to at least the other side of value, then I will Scale Out. During the Scale Out, I may also cover what I have scaled out on a pullback if the original reason for entering the trade is still valid.

The attached pic shows the two long trades being All Out and as soon as the VAH of Friday was touched, I went short with a view to trading it to the VAL of Friday. As you can see, I made money twice on the way down. I sold at the first touch and started Scaling Out. The market rallied and touched the VAH a second time and gave me the opportunity to sell what I had covered again so I made more after it hit my VAL target.


  1. Hi EL,

    I have 2 Qs please:
    1) Do you match your first scale to the range of the bar being used? For example, is the first scale target of 0.75 range bar is the same for 1.25 range bar (on es).

    2) After you enter (on bar close) what is your stop-loss?


  2. YW, No, I have a backtested far away drop dead stop and I stop myself out on context.