Partial (scaling) exits

One of the unique and dynamic things about Synergy is that it does not always get out of its entire position at the same point. It will occasionally scale out of winning trades. This is done in an effort to let profits run while simultaneously trying to lock in some of those gains. This is important because often times trend following systems will give back a large portion of their open trade profits.

However, you don't want to make the amateur mistake of exiting every contract at a profit target number. This is because if the trend turns into one of those occasional huge winners you don't want to miss out on one of the best trades of the year (or decade!). Granted, those trades don't happen that often but even one or two of them in a year can have a huge effect. In fact  Mathematician and "Market Wizard" William Eckhardt mentioned in a recent interview that he felt just using static preset (profit) targets was a potential form of curve fitting and was "suspect".

Synergy's strategy is a non curve fit compromise between two competing needs (lettings profits run and locking in profits). Keep in mind, Synergy does not scale out at fixed dollar levels (like $5,000 profit) because some markets could hit that in a day and others could take months. Instead, Synergy avoids curve fitting by scaling at a dynamic market driven levels.

Real Life Example London Copper

Here is a graphic display of how scaling exits can work.


Obviously the above scenario only has the potential to work when you are trading multiple contracts. This is why single contract reports are not able to show this. Fortunately Synergy has a relatively low initial risk per trade which means even relatively smaller traders will frequently trade multiple contracts.

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Risk Disclosures

COMMODITY TRADING involves high risks and you can lose a significant amount of money. Commodity trading is not suitable for many investors. Any performance results listed in all marketing materials represents simulated computer results over past historical data, and not the results of an actual account. All opinions expressed anywhere on this website are only opinions of the author. The information contained here was gathered from sources deemed reliable, however, no claim is made as to its accuracy or content. Different testing platforms can produce slightly different results. Our systems are only recommended for well capitalized and experienced futures traders.

CFTC REQUIRED RISK DISCLOSURE

HYPOTHETICAL PERFORMANCE RESULTS HAVE MANY INHERENT LIMITATIONS, SOME OF WHICH ARE DESCRIBED BELOW. NO REPRESENTATION IS BEING MADE THAT ANY ACCOUNT WILL OR IS LIKELY TO ACHIEVE PROFITS OR LOSSES SIMILAR TO THOSE SHOWN. IN FACT, THERE ARE FREQUENTLY SHARP DIFFERENCES BETWEEN HYPOTHETICAL PERFORMANCE RESULTS AND THE ACTUAL RESULTS SUBSEQUENTLY ACHIEVED BY ANY PARTICULAR TRADING PROGRAM.

ONE OF THE LIMITATIONS OF HYPOTHETICAL PERFORMANCE RESULTS IS THAT THEY ARE GENERALLY PREPARED WITH THE BENEFIT OF HINDSIGHT. IN ADDITION, HYPOTHETICAL TRADING DOES NOT INVOLVE FINANCIAL RISK, AND NO HYPOTHETICAL TRADING RECORD CAN COMPLETELY ACCOUNT FOR THE IMPACT OF FINANCIAL RISK IN ACTUAL TRADING. FOR EXAMPLE, THE ABILITY TO WITHSTAND LOSSES OR TO ADHERE TO A PARTICULAR TRADING PROGRAM IN SPITE OF TRADING LOSSES ARE MATERIAL POINTS WHICH CAN ALSO ADVERSELY AFFECT ACTUAL TRADING RESULTS. THERE ARE NUMEROUS OTHER FACTORS RELATED TO THE MARKETS IN GENERAL OR TO THE IMPLEMENTATION OF ANY SPECIFIC TRADING PROGRAM WHICH CANNOT BE FULLY ACCOUNTED FOR IN THE PREPARATION OF HYPOTHETICAL PERFORMANCE RESULTS AND ALL OF WHICH CAN ADVERSELY AFFECT ACTUAL TRADING RESULTS.