Who this is for — Traders closing all too early (reverse FOMO) or holding all until reversal. Scaling out balances cash and upside.
Scaling out closes position in pieces (tranches) at defined levels. Typical schema: partial at +1R or first target, break even on remainder, runner with trailing.
In plain terms — Half money in pocket early; half left running risk-free — best of both psychologies.
50/50 schema (runner)
- TP1 (~50%) — +1R or first obstacle → bank
- BE — stop on runner at entry
- Runner — rest with trailing stop until trend invalidation
Trade-off: max theoretical expectancy slightly ↓ vs 100% hold — anxiety ↓↓↓.
In playbook
- Fixed percentages per setup (not improvised)
- Aligned with scenario best/base case
- Log partials in journal
Typical mistake — Close 90% on first green tick — runner useless, R:R lost.
Example — 4 contracts: sell 2 at +1R (+2R locked), BE on 2, trail −15 pt → runner exit +3.5R total ≈ +5.5R on 4R initial risk.
Summary sheet
- Pro: psychological profit + trend.
- Con: max theoretical R ↓.
- Pair: break-even + trailing.
Silver path — Position management module. Index: Silver path.
Links
Sources
- CME Group, Risk management and your trade plan — connects position management, stops, and risk limits to the plan.
- CME Group, Proper position size — shows how to size a position from monetary risk.
- Investor.gov, Understanding Order Types — describes differences and limits of market, limit, and stop orders.