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.
Step 1: 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.
Step 2: 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.
Step 3: Grouping trades (optional)
If you want to keep your journal organized, you can use the “Grouping” function in Edgewonk. Multi-select trade rows in your journal that have the same instrument and direction (buy or sell) and once you right-click, the option “Groupin” becomes available.
A new row in Edgewonk is then created and it includes the selected trades.
Step 4: Exclude from winrate (optional)
If you fear that scaled trades skew your winrate calculations, you can also exclude individual trades from the winrate calculations.
In the trade entry popup window, the option “Ignore for winrate” will, as the name implies, neglect the specific trade in your winrate.
If, for example, you have a trade with one entry and three exits, you’d enter three rows in Edgewonk with a different exit price for each. You can then ignore two out of the three trades from the winrate calculations to get a more accurate idea of your 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.