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1991issue C091-13

A written game plan for checklist, scale-out and staggered stops

A written game plan reused in every cycle is presented as the device that restores focus when information flow and social pressure make the market emotionally noisy. Market bias is scored first from six plus-or-minus indicator classes. Name selection, size, scale-out and staggered stops then follow that score.

  • A written game plan reused in every cycle is presented as the device that restores focus when information flow and social pressure make the market emotionally noisy.
  • Market bias is a plus-or-minus tally across valuation, bonds, institutional cash, public sentiment, commodities and momentum, and the work order is market first, then groups and names, then money-management rules that tighten or loosen with that score.
  • Name selection requires at least two of three checklist items: a strong group, a long base marked by a one-and-a-quarter-year high, and relative-strength confirmation, while no single name may hold more than 33 percent of investable funds.
  • A planned scale-out banks the first two-thirds at successive 20 percent and 40 percent gain checkpoints, leaves a trailing third on a trailing stop, and staggers stops so a 20 percent decline is treated as possible noise and a 30 percent decline as likely failure.
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Current trackScale-out position reduction22 readingsPre-trade checklist245 readingsStop-loss order297 readings

A written game plan for every cycle

A written game-plan reused in every cycle is presented as the device that restores focus when information flow and social pressure make the market emotionally noisy.

Score the market before any name

Market bias is formed by assigning a plus or minus to six indicator classes: valuation, bonds, institutional cash, public sentiment, commodities and momentum. The signs are summed into a supply-demand-score.

Valuation, cash balances and public sentiment are used as proxies for spent versus unused buying power rather than as precise quantity measures.

The procedure follows a top-down-sequence. Score the market first, then groups and names, then apply money-management rules that tighten or loosen with that score.

Name checklist and position constraints

Name selection follows a checklist-process: a strong group, a long base marked by a one-and-a-quarter-year high, and relative-strength confirmation, with at least two of the three required.

Position construction is constrained to more than one holding and to no more than 33 percent of investable funds in any single name. Entry intensity is condition-dependent: scale in when conditions are mixed, or buy more aggressively when the market score supports it.

Scale-out checkpoints and a trailing third

A planned scale-out-position banks the first two-thirds at successive 20 percent and 40 percent gain checkpoints. The last third is left as a trailing-third on a trailing stop.

Staggered stops and loyalty to the score

Weak market scores increase loyalty to stop-loss rules. Strong scores allow more latitude on capital preservation.

Stops are placed as staggered-stops across slices of the same holding so one print cannot force a total exit. A 20 percent decline is treated as possible noise and a 30 percent decline as likely failure.

Educational research material, not investment advice. Historical source context does not establish present-day performance.
3 of 18 in the Scale-out position reduction track
20041-2 pp.Next on Scale-out position reductionName the stop, require a 1:3 reward, then scale out halfName the stop-loss before entry so the worst-case loss can be inspected and the exit is not improvised if the position fails.
All readings on this track · 18 readings
  1. 1989One add option sizing with a scale-out and a trail
  2. 1991Precommit scale-outs and puts to replace impulse
  3. 1991A written game plan for checklist, scale-out and staggered stops
  4. 2004Name the stop, require a 1:3 reward, then scale out half
  5. 2005Why pre-target scale-outs lower expected value
  6. 2008Preplanned butterfly exits with stops and scale-outs
  7. 2010Qualified trend, volume breaks, and a staged scale-out
  8. 2011Gated entry and scale-out after a climactic selloff
  9. 2011First-target review: scale out or flatten
  10. 2012Tiny scale-out as a systems decision test
  11. 2014Written size and exit scripts for scaling and risk
  12. 2017Constructing livable scale-out exit rules
  13. 2017Why the simpler looking system is harder to run
  14. 2018Prewritten scale-out and exponential moving-average exit procedure
  15. 2019A dual-career swing procedure that must output entry, scale-out, or abstention
  16. 2019A same-session opening-range breakout with a whole-number stop and scale-out
  17. 2019Grade the first seasonal long-put gain as a maintenance exam
  18. 2019Failed candlestick fades with breakout permission and scale-out
By fieldDecision process416 readingsBy year1991166 readings
All 22 readings tagged Scale-out position reduction
Also on Scale-out position reduction5 readings
2019A dual-career swing procedure that must output entry, scale-out, or abstention2004Name the stop, require a 1:3 reward, then scale out half2008Preplanned butterfly exits with stops and scale-outs2019A same-session opening-range breakout with a whole-number stop and scale-out1989One add option sizing with a scale-out and a trail