How To Scale In And Out Of Positions In the Most Effective Way With Options Trading.

Have you ever let a winning trade turn red, or seen the price take off as soon as you cover your position? As a full-time trader, I have faced these situations many times. However, I have found a solution that works for me. In this blog post, I will share exactly how I scale in and out of positions to prevent these scenarios from happening.

My trading strategy is based on supply and demand. I usually get in at the top of a demand zone or the bottom of a supply zone with 100% of my position. However, there are times where I will scale into a position. When the price dips into the 50% retracement (FVG) and there is still decent room to demand below, I'll typically get in 25% of my position there. I'll then add a full position if the price dips lower to demand.

I don't advise adding to winners; I only advise adding to losers if it's part of your plan. You should always have a stop in place and get out at your stop. Never add to your position after your stop has been hit. That's not what I'm advising.

I always make sure to get in a very small position early in case I miss the real entry. It allows me to still have a decent entry if the price drops lower, and it also allows me to catch the move if the price decides to rip.

Your exit strategy will ultimately depend on your overall strategy. However, for all small accounts, I recommend not to scale. Scaling exits should really only be for accounts that can afford to take multiple contracts (5-10+). Otherwise, it's better off just taking 100% off at your first target.

If you do have a larger account, here's how I recommend setting up your exit strategy. In my opinion, it's best to only have three targets/exits max. After three, there's really no need to complicate your trading anymore. I advise taking the majority of your profits out at the first target, which is usually 70-80% of your position. I like moving my stop to breakeven after I've taken my first partial.

After taking my first partial, that's when I can leave 20-30% for runners. I can either take the remaining runners out at my second target or take half out at my second target and leave 10-15% for my last target. The larger your account size, the more targets I recommend you have. I also like moving my stops up after each target to make sure the trade doesn't go red.

By taking the majority of my size off at my first target, it allows my strategy to keep a decent R/R rate, assuming I move stops to breakeven. It also leaves my trading more "stress-free" since I have less of a position on. It allows for the trade to come back breakeven, and I've already taken most off. On top of that, I have 20-30% of my position as runners in case this stock starts to explode. It doesn't happen often, but sometimes the remaining 20% ends up netting me more profit than the original 80% did. Click here to view my twitter which has 100s of better content like this.

Disclaimer: This is not investment advice. I am not liable for any losses you may incur while trading. This is purely educational content.