,
3 tweets,
1 min read
Read on Twitter
I see CT traders say "I'm scaling in here" or "looking to scale out."
Scaling is inferior behavior b/c when you are right, you will be filled for only a part of your size, while when you are wrong, you will be filled for your full size. It's a mental crutch so that you feel good.
Scaling is inferior behavior b/c when you are right, you will be filled for only a part of your size, while when you are wrong, you will be filled for your full size. It's a mental crutch so that you feel good.
One of the most influential videos I've seen is @novogratz on opalesque. He said traders will be bullish but then sell calls, or they'll scale out, or hedge. Consequently, they tend to under-perform the totality of their actual views due to psychology.
samples
1) short-term pos become long-term, vice versa
2) sell half your size too early, but then chalk it up to "no one ever went broke taking a profit"
3) add to losers, cut winners short
4) scale into longs, get filled for 25% of full size, and then feel good when mkt goes up
1) short-term pos become long-term, vice versa
2) sell half your size too early, but then chalk it up to "no one ever went broke taking a profit"
3) add to losers, cut winners short
4) scale into longs, get filled for 25% of full size, and then feel good when mkt goes up
