1. Scaling Trades In and Out
© 2009 ProAct Traders LLC

2. Trading foreign exchange on margin carries a high level of risk, and may not be suitable for all investors.. Before deciding to trade foreign exchange you should carefully consider your investment objectives, level of experience, and risk appetite. The possibility exists that you could sustain a loss of some or all of your initial investment and therefore you should not invest money that you cannot afford to lose. You should be aware of all the risks associated with foreign exchange trading, and seek advice from an independent financial advisor if you have any doubts. See disclaimer at: 

3. Scaling Trades In and Out
Why?
These are actually two separate techniques that look the same but in reverse
The idea is to “ ease” into trades with less margin which means less risk
The Scaling out is taking profit at PREDETERMINED levels – Note the word: PREDETERMINED!!!!!!

4. Scaling Trades In
When you first put a trade on you have no clue if you are on the right side of the order flow. All trades look great until they look bad – so that is the function of Technical Analysis and the use of ProAct’s proprietary indicators to increase the probability and decrease the risk of a bad trade
Scaling in simply means using only a small part of your margin on the initial entries and adding to the trade as it proves itself to be high probability
So what do we need….

5. Scaling Trades In
First your Technical Analysis should give you the anticipated direction, the targets that you should aim for and the barriers that exist to completing this move
Barriers may be: T30’s, Previous support or resistance, Fib levels, HSI levels, Trend walls etc.
Then you need a trade setup that says we are “setup” to pull off the Technical Analysis: This is a Wild Card, 6 Aces or a Royal Flush.

6. So let’s look at one

7. 2) HSI from Top
1)Fibo from Top
3) Broke the .786 Fibo
4) Break of the S6 HSI
5) Ultimate Target

8. Scaling Trades In
A break South would give us a a reason to enter a small position at the break. Because we could get a FALSE BREAKOUT we will scale in!
Best way to do this is to take an ENTRY ORDER 10 pips or so BELOW the S6 with a ½ position. We will expect the currency to come BACK to the S6 and test it for the possible buy the other way so we won’t freak out when it does.
When it tests it and breaks south again. As soon as the first position is in profit we will look to add another position on – the other ½ for the Target

9. So we now have two choices
A break South would give us a CONTINUATION of the Trend which means we need a Wild Card or Royal Flush to Setup
A break North would mean a 6 aces COUNTER TREND - Counter Trends should NEVER be scaled in!
So whichever one you get tells you what the rules are to enter this

11. ALL OF THIS IS PREDETERMINED
In other words you have to plan it all ….Plan? I don’t need no stinking plan HA!!!!!

12. Scaling Trades Out
Is the opposite – you PLAN (there it is again…dang it) to take profitable positions off at key spots
A good rule of thumb is “First in – Last out”
At key places like: 55 pips, An HSI level, a fib level… you will take a portion of your trade off and let the rest run.
You can also scale some back in after pullbacks

13. Reenter on WC
55 pips take portion off
90 pips take portion off
55 pips take portion off

14. Each Trade presents it’s own opportunities and there is no right way to do it except for it must be PRE – Planned!!!!

15. Thank You