What's Scaling in?

Scale in is a trading strategy that involves opening multiple units at different price levels to maximize your profits . When a trader opens a position, he waits until some circumstances to happen to add other positions to his current one. It's considered as an advanced strategy because it rises your risks if the market goes against you.





In this article, we will discuss three conditions traders should add to their current open positions.





Moving Averages





In this approach, we use three different moving averages: 5-day EMA (black line), 20-day EMA (purple line) and 50-day EMA (orange line).





Let's take an example. Below is the USD/CAD daily chart.





Firstly, we opened a long position when 5-day EMA crossed above both 20-day EMA and 50-day EMA. ( We can also open long when 5 EMA crossed above 20 EMA if it's followed with a bullish candle closed above 50 EMA for confirmation).





To add more long positions, we waited the price to rebound from both 20 or 50 EMA. The more the price rebounds from the them, the more reliable our trades will be.