Scale In
Order Types
What it means
Building a position in pieces instead of all at once, so your average entry improves if price pulls back against you.
Example
Instead of buying 300 shares at $100 at once, you buy 100 at $100, 100 at $98, and 100 at $96. Your average entry is $98, lower than the first entry.
Mistake beginners make
Beginners scale into losing trades with no final stop, turning a small loss into a huge one. Scaling in without a max size and a stop is just doubling down on a bad idea.
Related terms
- Scale Out — Closing a position in pieces instead of all at once, so you bank some profit while leaving…
- Position Sizing — Deciding how many shares or contracts to trade based on how much you are willing to lose, …