Scaling out of DAX trades – managing profits vs. holding for more
Hey everyone,
Been trading the DAX for a while now, mostly intraday or short-term swing setups. I'm finding myself in a consistent dilemma when a trade moves in my favor. Say I'm up R multiple, and my initial plan was to take 50% off at a certain resistance, then let the rest run. But sometimes, price gets to that resistance, looks strong, and I hesitate. I end up taking less off, or none, hoping for a bigger move, only for it to retrace significantly and eat into my gains, or even stop me out at breakeven. Other times, I stick to the plan, scale out, and it runs for another 2R.
How do you guys balance protecting profits against giving a good trade room to run? Is it purely mechanical, or do you adjust based on price action at your scaling points? I'm trying to refine my process here, feels like I'm leaving money on the table both ways sometimes.
It's a common challenge. Have you considered using a trailing stop on the remaining position after taking your initial profits? That way you lock in gains but still give the trade room to run if the momentum continues.