To scale in/out or not?

In another thread on whether/when to use ExRem() and scale-in/-out, @newbietrader provided a quote from Howard Bandy (in 2010), that it is better to be “all-in” or “all-out” rather than scaling the position.

As a counterpoint, Russ Abbot says in his paper “Equity markets and computational intelligence” 2010: “As [Stokes] points out in what I consider one of the best trading blogs on the web. it is generally more effective to scale into and out of positions rather than to be either all-in or all-out.”

Unfortunately, there doesn’t appear to be a published article supporting Howard’s point of view, unless it’s in one of his books, and the one referred to by Russ is now behind a “subscriber wall” – so, effectively there’s nothing to substantiate either point of view.

I’m not advocating either approach, and tend to think that it depends on the strategy, your performance expectations, and risk tolerance, however, it would be useful to have some published articles that explore these ideas, including the testing methodology, and some stats to back it up.

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Interesting topic, @sinecospi ...It seems this forum need to have more topics like this. :smiley:

You could back test your various trading strategies to see which method (all in/out OR scale in/out) works best.

I was hoping Howard might have chimed in by now. What I have read in his books and seen on his video tuts, Howard generally only holds for a few days, hence why all in/out may work better for him.

Edit to add: I was able to access the document by Russ Abbott without subscribing.