All language subtitles for 5. Adjusting Positions

Let's say you bought a security and it's you know, and you're looking at it and something's happening

and you want to adjust your position, you know, you want to either put more in on that same security

or maybe take some of your profits out, for example, or take some money out.

And that's where we're going to as far as adjusting positions, that's really changing the amount that's

invested in an existing position.

So this is not buying a new security.

This is a security are already on me.

It's going up.

Maybe it's going down, but you're already in the security and you want to adjust how much money you've

invested in that either up or down.

And there's Freese's for that one is called scaling it.

Right.

And that's basically simply adding to my position.

Right.

I'm putting more money in.

That's going to increase my risk because now I put more money in and potentially my reward because I

put more money into.

So that's the idea of scaling.

And I, I have a feeling that things are going to go well and so and maybe already going well right

now.

So I had to put a little bit more in to try to, you know, you know, capture even more profit and

have more profit because I'm putting more in I'm going to put more risk, but I want to get more reward.

So that's putting money in the scaling in.

Scaling out is taking money out.

Right.

That's reducing opposition.

And the idea is I'm trying to reduce my risk.

I'm trying to reduce my exposure.

I might miss out.

You know, maybe I've invested in that.

Maybe it's gone.

Well, I've got some profits, but now I want to take some profits out of there by not selling the entire

position.

But now I want to adjust my position and scale a bit of it out scale and take some of those profits

out and leave some in the ride up a little bit higher, maybe, too.

So scaling in or scaling out is again adjusting your position within something a very but you've already

invested in.

So the most important question of the first question to ask yourself when you're looking at adjusting

a position, is that really truthfully, honestly, ask yourself why?

Why am I doing this right?

You know, do why do you want to adjust your position?

Is it just a feeling?

I mean, you feel good because the security's been good.

So it's been a gut feeling.

I just kind of feel good about it.

Well, that's not a great reason from a technical analysis standpoint to go with your gut.

Somebody said something on TV that's a common one, too, like, oh my my investments.

Dunwell Oh, somebody said some good stuff on my TV, so I'm not going to put more money in, you know,

again, true technical analysis.

I would be cautious on that, too.

Sometimes you just come into some more money, right?

You've got a bonus at work or an inheritance or something, or you decide that you want to take some

of your savings and put a little bit more into your trading and you feel more comfortable.

You're seeing some results.

You're seeing some profits.

So that even added more money to your trading account.

You can start using that to either create some new positions or maybe you have a good position you want

to scale into.

You can add some more money into that as well.

Or maybe you're seeing other opportunities out there where you're scaling out where I want to take some

money out of a profitable position and maybe I'm looking that might be starting to run its course,

but I'm not fully out of it.

You know, I want to let it run a little bit more.

I want to take a little money out because I see another security I want to and I want to invest in.

So, you know, let's more around money management.

That's not a bad idea as far as suggesting your position around money management, just doing it on

a gut feeling and really, really we want to drive this all around is a technical analysis, right?

This whole idea of trading and buying and selling.

So your indicators are telling you something that might say to yourself, why am I doing this?

Well, because my indicators saying something to either buy or sell or buy is a scale up or sell scale

down based on what the indicators are telling me.

And that's always a good reason as far as, you know, making a trading decision and adjusting your

position.

So we think about that scaling and then scaling out, you know, scaling and increasing our position.

You know, maybe something's changed with you where your risk appetites change, right.

As you learn and as you apply your trading knowledge, you might be more comfortable taking on more

risk.

And so we we start with smaller amounts of money.

It's not a bad idea, the first paper trade, but after that, you know, with fake money.

But after that, maybe you want to put in smaller amounts.

But now you're like, you know what, I can I'd feel more comfortable.

I can put in a little bit more.

And I like this existing position.

So I'm going to put a little bit more into that one because I'm willing to take on a little more risk

to get that reward.

And there's this thing where you might scale in and use a technique called pyramiding, you know, kind

of like a pyramid.

Right.

And the idea is you have some built in profits already.

You're kind of playing with house money.

You've had a nice trend up and you've got some profits.

Right.

And then you're adding funds and then you're going to adjust your stop loss to protect those gains.

Right.

So I'm tenth that pyramid.

That trend is like a pyramid.

We're kind of going up or the whole thing's going up.

So it's gone up now.

I'm like, OK, I'm going to just my stop loss up to protect those gains and I'm going to put a little

bit more in because I raised my stop loss up there with the new money.

If it goes back down, I've got my stop loss to stop me here and lock in the previous gains and minimize

my losses.

Maybe if I put something new in and if it keeps going up, then I can adjust my stop loss to follow

along with it.

So I say the pyramid pyramiding, you're kind of playing with health and money.

You've had some profit.

You're locking that profit with your stop.

And they are putting more into scale and because you feel good, because your indicators are telling

us it's still good to keep investing in it, but you're adjusting your stop loss to protect those gains

and you're protecting the new money at the same time from a significant loss, scaling out some ideas

around that as far as reducing your position.

Again, that's all about money management.

We're looking at money management and we're trying to reduce our exposure.

Maybe there's some big news that's coming up.

Right?

There's something going on where, you know, there's a big news event, something that's going to come

coming up that's on the calendar.

It might be a government type thing that you're talking about with currency or if you're looking at

securities that might be stock based securities, you're looking at a company event.

Something's happening that you know is going to be coming.

There be an announcement.

Maybe it's a presidential election.

You're not sure which way it's going to go.

There's something coming.

So you might want to scale out or take some of the money out prior to that news event.

If you're really kind of concerned about which way that news event might go, especially if you think

it goes not in your favor, then you might be able to drop real quickly.

Again, that's where stop losses will help protect you a little bit, too.

Or you want to use do you want to scare him a little bit before where you want to use that money for

a more attractive trade?

Maybe your you've invested and something's gone up real nicely and you feel real good about but starting

to lose steam.

Your indicators saying it's starting to kind of peak out.

You might see some exhaustion coming there.

You know, like, well, let me take some of those profits out and put it over here, because I got

a great trading opportunity over here based on my indicators.

So I have less money that I've already locked into those gains by taking it out and I'm putting in another

trade.

So that's scaling out as far as reducing your position.

And so you see a lot of things around scaling in and scaling out.

You're going to combine your indicators to help you understand logically what to do.

But then you're using things like money management and risk appetite and things like that to kind of

look at overall from a more holistic standpoint as far as adjusting your positions in there.

And again, that got don't have a gut feeling on it.

Use your indicators.

And lastly, always ask yourself, why really be critical to yourself on that question of why?

Why am I doing this?

And if it makes sense to you, do it.

If it doesn't, well, then then don't do it.

You know, it should be a real clear that the issue will clearly explain the why behind that you want

to do this.

So good luck with scaling in and out.

It's a great way to kind of adjust and manage your money.