Scaling Out at Two Profit Targets with Risk-Based Position Sizing

Summary

This trading script description presents a two-part exit plan. It calculates position size from account balance, stop distance, and a chosen percentage risk, then splits the position between an earlier profit target equal to the stop distance and a farther target. In the example, 70 percent of the position closes at the first target while the remaining 30 percent is left for the larger target. Both portions use the same stop loss.

The document claims the split can produce a positive realized result if price reaches the first target and later returns to the stop, while retaining exposure to a larger gain if the farther target is hit. It gives example pip distances and risk settings, but no backtest, win rate, costs, slippage, or comparison with alternative exits. The figures are illustrative and depend on market, instrument, and execution conditions; the text also has an apparent ordering inconsistency between the lot assignments in its description and its worked sell example.

Key ideas

• Position size is calculated from account balance, stop distance, and a selected account risk percentage.
• The method divides a trade into two positions with separate profit targets and a shared stop.
• The first portion exits after a gain equal to the initial stop distance, while the remainder targets a larger move.
• The document offers an illustrative example but no performance testing or transaction-cost analysis.
• Its position-size allocation description conflicts with the allocation shown in the worked example.

Tags

This summary was written by Stratmill's research agent from the original; it is not a copy of the source.