Scaling In & Scaling Out
You should rarely enter a full position on a currency in one order. It is more appropriate and profitable to scale into a position initially rather than placing 100% of your available lots on the trade immediately. As your trade begins to lose momentum, you should scale out of the position. Scaling in is the practice of placing two, three or four planned entry executions in a given trade at the appropriate price levels. Scaling out is the practice of placing all of your lots into a trade initially and removing them in halves or thirds as profits are realized.

You should look for several entries at key areas of resistance/support levels, trend lines, fibs, or other targets on the charts. The first trade always carries the most risk. If your first entry is wrong you will be wrong small if you scale in on the initial position. Scaling in and out of your entries helps you to avoid tying up too much margin account capital in one currency at one time. For example, if you enter a full position of 3 lots in a currency by executing just one 3-lot trade rather than 3 one-lot trades, your capital is tied up for the duration of the trade. By scaling in, you reduce the amount of time the full amount of your capital is tied up in the trade.

To avoid unnecessarily tying up the capital in your margin account, your best strategy is to break your trades into thirds.

If you are currently trading 1 standard lot – QUIT IT! Trade 9 mini lots instead, entering with 1/3 of your lots, adding the other 2/3 only after the trade proves itself.

If you are currently trading 1 mini lot – QUIT IT! Trade 9 micro lots instead, entering with 1/3 of your lots, adding the other 2/3 only after the trade proves itself.

By using this strategy you have many more entry and exit options. Scaling out of a position serves two purposes. First, it allows you to increase your total gain and free up margin account capital while you are trading. By taking profit on half or a third of the position at the first resistance level, you can hold the remaining position for a larger gain, while minimizing the risk of a losing trade. If that resistance level is not broken on the first attempt, and the currency retraces, you can add another position, or simply keep the remaining original position for an eventual breakout above/below the support/resistance. The second purpose of scaled exits is to free up trading capital for other opportunities in additional currencies. This allows you to spread your risk around rather than relying on one currency pair. Always remember to keep watching your margin account balance so you do not violate the 2% rule in total as you are adding positions. Violating this rule could result in a margin call where all your trades are taken out.

Generally speaking, the best plan is to trade for consistent, short-term profits, with occasional larger gains. Scaled entries and exits enable you to do several things. They enable you to enter at the lowest possible cost and thus have the lowest average cost. Scaling in allows you to have an initial position which will enable you to achieve your goal of short-term profit with a scaled exit on half of your positions if the first resistance/support levels hold. Scaling in also allows you to achieve larger gains by holding the remaining half comfortably. Scaled entries and exits are very closely tied to good margin management, as well as the daily trading plan you need to develop for each currency you plan to trade.

0:03:04 *ETC/USD
0:05:39 *FCT/BTC
0:05:47 *FTM/BTC
0:10:20 *BNB/BTC
0:11:31 *BTC/USD
0:16:24 *Scott talks about candlestick patterns by looking at BTC/USD candles. He also discusses the need for analysis in multiple timeframes and how candlestick patterns are more important in the bigger timeframes.
0:27:23 *Scott takes a look at the fibs on BTC/USD and discusses the important fibs in regards to potential areas to scale in or out
0:32:40 *Mo Time
0:36:27 *Scott Returns
0:36:32 *BTC/USD
0:38:10 *ETC/USD
0:38:15 *ETH/USD
0:38:44 *Scott talks about looking for a trigger on the next potential ETH move by looking at the important fibs and a break of the local downtrend
0:39:09 *Scott takes a look at higher timeframes to look for candelstick patterns and other important info
0:45:54 *ETH/USD
0:46:43 *Scott talks about scaling in and out of ETH/USD
0:49:07 *Scott takes a look at the price action on ETH/USD leading into the signal call that was released on it
0:49:51 *Scott talks about how to look for places to scale in on the way up
0:58:43 *Scott takes a look at the important fibs on ETH/USD and how to use that information for scaling in and out
1:09:00 *LTC/USD
1:10:22 *BTC/USD
1:16:38 *END