How to Trade Forex Using Scaling Out

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How to Trade Forex Using Scaling Out


Scaling out is a way to close a transaction that generates profit only, while the transaction is still losing will not be closed.

Have you ever had an unfortunate incident related to a close position? A few days after closing, prices tend to continue the trend. You start to regret and wish, if you didn’t do it, of course the profits would be multiplied. Or worse, after a close, the price actually moves hundreds of points, whereas before it did not move much. Have you ever had this kind of condition?

Previously, we congratulate you for getting profit in trading. And for those of you who are less fortunate, do not keep on grieving because below we will describe the right trading management strategy.

Scaling out is a way to close a transaction that generates profit only, while the transaction is still losing will not be closed.

There are two things you need to remember when implementing this strategy:
1. The more transactions you make, the greater the risk you will face.
2. Make sure you always use the rules of money management, so no need to experience an overtrade transaction on your trading account.

Below, we will show example of USD / CHF daily chart:

For example there are 4 transactions that both use 4 lot volume. Transactions are made based on the reflection of prices that have been placed pending sell order in the area of ​​the reversal. After pending order is done considering the decrease seen in the first black arrow in the picture above, it can be predicted that the price will continue to plunge downwards. Decrease occurred by 250 points from the opening position.

After the price reaches the second black arrow, one of the transactions starts to close. So now there are 3 transactions left. When the price touches the third arrow, the transaction is closed and leaving two transactions that still survive. Closing the transaction gives a profit of 600 points.

Furthermore, we can observe that the price is still moving and the trend is still showing its bearish strength. The third transaction position is closed when the price has reached the third arrow. Of the three close positions, the trader has collected a profit of 1050 points. Until finally, the fourth position in-close is the same as closing the first position until the third.

Scaling Out Strategy can be used as a reference for a useful transaction. But keep in mind that no one strategy is perfect, including Scaling Out. Ideal trading must have a trend that can last for quite a long time. Please note, if the market only happens sideway only, then Scaling Out is not appropriate to apply.

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