That was a short trading opportunity right off of resistance on the spy worked out nicely, and this one actually hit the trading stop. It would have been a very profitable trade on this signal.
Let's say you had bought puts on this sell signal and it made a nice move down, but then another buy signal comes in. That could have been your scaling opportunity.
And here it would be easy to scale-in, just by adding more put contracts as the overall market goes down.
So in this case, the S&P did go down after the sell signal, and we got another opportunity to potentially scale-in at two lower levels of support.Scaling into the trade can really makes sense whether you’re bullish or bearish.
When I’m trading in my personal account or in my hedge fund, I’m always using this scaling in-and-out methodology in terms of Money Management.
Once I figured it out, I was able to make money whether the market is going up, down, or sideways. And I think scaling-in could help give you this trading edge too.
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