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21
Dec

2

How To Scale In And Out Of Trades In Edgewonk

In this article we explain how to enter trades correctly where you have scaled in or out of the trade and taken multiple entries and exits. We also provide some tips around tracking such trades to help you understand your trading performance in new ways.

 

Trade Entry I: One row per trade portion

Basically, each time you close a trade or a portion of it, you need to use a new row in Edgewonk. Many traders ask if they can ‘average’ trades with multiple entries and exits but we don’t recommend that because it can hide problems and flaws in trade and risk management.

Let’s say you enter a buy trade at $100 and you then exit half for a loss at $95 and you exit the other half for a profit at $110. In Edgewonk, such a trade would be entered using two separate rows. This is just a basic example but you can already see that averaging trades would disguise what really happened and it’s important to record each action as a single trade. 

 

Trade Entry II: The Duplicate function in Edgewonk

When entering your trades in Edgewonk, you can speed up the process and after you have entered your first trade, you can right-click it in the journal table. Then select “Duplicate” from the dropdown menu, this creates a new trade and preserves some of the initial trade data.

You only need to make changes where something differs and it saves you a lot of time entering new trades.

 

Custom Statistics

If scaling in and out of trades is something you do regularly we recommend setting up a Custom Statistic to tag and analyze your trades.

There are different ways how to go about this and you could set up a custom statistic with the tags: first entry, second entry, third entry, or first exit, second exit etc.

Another way of using the custom statistics here would be to just add two tags: not scaled in/out and scaled in/out. This way, you create two categories of trades and you can analyze those trades where you used multiple entries/exit and those where you didn’t.

Another approach some of our users chose when they always split their trades in the same way; let’s say you always split your trade into 3 individual positions, you can create a Custom Statistic with the tags: first, second, third. The analytic process will then exactly show you how each position performs, what works best and where you can improve. 

In the end, you can use the Custom Statistics as you please and those are just suggestions, but tagging your individual trades will allow a very targeted and detailed performance analysis later on.

 

Scaling in as an excuse to micro-manage?

Many traders (ab)use scaling in and out of trades when they become emotional or just impulsively react to price moves without having a plan. If that sounds like something you do, using two categories (not scaled in/out, scaled in/out) in your custom statistics will show you exactly whether you are making or losing money by scaling into our out of trades.

You can then also utilize the other Edgewonk features to dissect your performance further and get a better understanding of how your approach impacts your trading account. 

 

Manual journaling to uncover bad behavior

Although we will soon start introducing the first stage of the broker statement import into Edgewonk, there is no replacement for manually journaling trades. The painful process of going over yet another trade where you added to a loser or scaled out too early can have healing power and many traders report that going over their closed trades during their journaling practice helps them understand what they are actually doing.

Granted, it is a little extra work to journal your trades manually but it’s time well spent when it shows you what is keeping you from achieving success. 

Comments (2)

  • traderjeff

    This is the only reason I’m on the fence. I love virtually everything about your system EXCEPT the fact (so far) that you can’t scale in and out of trades easily. Virtually ALL my trades are scaled into and out of. Please fix this for us day-traders or others that scale as an integral part of our trading plan.

    reply
    • Moritz

      Hi Jeff,

      scaling in and out of trades is – essentially – opening and closing new trades, this is the mathematically correct way to analyze them. But we will improve this feature in the future so it will be easier to “cluster” them :).

      Bests,
      M

      reply

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