What is scaling and how use
Опубликовано: 2025-02-24 18:20:18
and how use it? 🤷🏻♂️
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Scaling basically means increasing or decreasing an open position while trading.
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This helps to adjust overall risk, lock in profits, or maximize potential profits 🙌🏽
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Of course, there are potential drawbacks to this method that you should be aware of.
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🚨Scaling benefits
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The biggest benefit is psychological.
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Increasing and exiting a position eliminates the need to be absolutely perfect when entering or exiting.
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No one can consistently predict price action or the exact turning point of the market. The best thing to do is to identify the “area” of potential support / resistance, reversal, change in momentum, breakout, etc.
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You can enter your position in parts around these areas and/or make trades at different levels to lock in profits.
⠀
Done correctly with a trailing stop, scaling winning positions will help protect profits in case the price suddenly reverses.
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If you add more to your open position and the market continues your way, a larger position size will increase the amount you will make for each pip.
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🚨 Disadvantages of scaling
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The main disadvantage of scaling is when you increase your position. Can you guess what this flaw is?
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THIS INCREASES THE TOTAL RISK ✋
⠀
Traders are primarily "risk managers" and if not done correctly, "scaling" can destroy the account
⠀
The second disadvantage: when you take away part of your open position, you reduce the maximum potential profit.
⠀
Well, in fast and dynamic markets like the forex, it can be beneficial to reduce risk and take some off the table.
⠀
⠀
Scaling basically means increasing or decreasing an open position while trading.
⠀
This helps to adjust overall risk, lock in profits, or maximize potential profits 🙌🏽
⠀
Of course, there are potential drawbacks to this method that you should be aware of.
⠀
🚨Scaling benefits
⠀
The biggest benefit is psychological.
⠀
Increasing and exiting a position eliminates the need to be absolutely perfect when entering or exiting.
⠀
No one can consistently predict price action or the exact turning point of the market. The best thing to do is to identify the “area” of potential support / resistance, reversal, change in momentum, breakout, etc.
⠀
You can enter your position in parts around these areas and/or make trades at different levels to lock in profits.
⠀
Done correctly with a trailing stop, scaling winning positions will help protect profits in case the price suddenly reverses.
⠀
If you add more to your open position and the market continues your way, a larger position size will increase the amount you will make for each pip.
⠀
🚨 Disadvantages of scaling
⠀
The main disadvantage of scaling is when you increase your position. Can you guess what this flaw is?
⠀
THIS INCREASES THE TOTAL RISK ✋
⠀
Traders are primarily "risk managers" and if not done correctly, "scaling" can destroy the account
⠀
The second disadvantage: when you take away part of your open position, you reduce the maximum potential profit.
⠀
Well, in fast and dynamic markets like the forex, it can be beneficial to reduce risk and take some off the table.
⠀
