AFT8 offers three distinct ways to size and scale positions, allowing traders to manage entries and exits in stages rather than all at once. These modes are:
- All-In, Scale-Out
- All-In, All-Out
- Scale-In, Scale-Out
Each method breaks trades into tranches—entering or exiting partial positions—so you can control how much capital is at risk at different points. This incremental approach helps lock in profits or curb losses as the market moves. While all three are available, most traders use “All-In, Scale-Out” or “All-In, All-Out” for simplicity. “Scale-In, Scale-Out” is reserved for experienced traders comfortable with building into a position and managing multiple exit levels. AFT8’s Algo Trade Manager handles all scaling once you’ve chosen your mode, though scaling in must be initiated manually to keep risk in check.
1. All-In, Scale-Out
- How You Enter: As soon as your entry conditions trigger, AFT8 commits the entire intended position at once. You receive your full number of contracts or shares in a single fill.
- How You Exit: Rather than closing everything at once, you set predetermined exit points. For example, you might take 50% off at the first profit target, 25% at a second level, and allow the remaining 25% to ride to the final objective. AFT8 automatically submits the staggered exit orders behind the scenes.
- Why Use It: This technique secures partial profit early while still leaving room to catch larger trends. As the price moves in your favor, you shave off risk rather than waiting for a single exit signal. It’s particularly useful when you believe in a strong trend but want to lock in gains gradually.
2. All-In, All-Out
- How You Enter: Identical to “All-In, Scale-Out,” you buy or sell the full position immediately upon signal.
- How You Exit: You close out 100% of the position in one go when your exit parameters are met—no partial exits, no staggered targets.
- Why Use It: For traders who prefer the cleanest possible execution, this mode keeps things simple. You commit all capital up front and exit on a single signal, eliminating the complexity of managing multiple orders. It’s ideal when you want a straightforward, no-nonsense entry and exit.
3. Scale-In, Scale-Out
Also known as position compounding, this method is best suited for advanced traders.
- How You Enter: Instead of jumping in at full size, you build your position over multiple steps. For instance, you might initiate 25% of your total allocation when the first momentum threshold is met, then add another 25% if price confirms strength at a higher level, and continue until you’re fully invested. You decide the increments and price levels in AFT8’s position size settings.
- How You Exit: Your exits are also staggered. You might take 20% off at an early profit point, another 30% if the market retests a key level, and then let the final 50% ride until your maximum target or stop is hit. AFT8’s Algo Trade Manager automatically places these exit orders according to your rules.
- Why Use It: By scaling in, you reduce the risk of entering on a false breakout or sudden pullback. Scaling out then locks in gains in stages, so a reversal can’t erase all your profits. This dual-stage approach gives you maximum control over both entry and exit risk.
How AFT8 Manages Scale-In/Scale-Out:
Once your initial signal fires, AFT8 handles each tranche automatically. If you prefer to add manually, you can still use NinjaTrader 8’s Chart Trader, order tickets, or DOM to increase your position; AFT8 will immediately queue up the corresponding exits. Note that scaling in is disabled by default to prevent inexperienced traders from overleveraging. Only advanced users who fully understand the risks should enable it.
How to Choose Between Them
- All-In, Scale-Out is ideal if you have very high conviction in your signal but still want to lock in profits gradually.
- All-In, All-Out works best when you want a clear, unambiguous entry and exit—no partials.
- Scale-In, Scale-Out is for highly dynamic markets where you’re uncertain about the signal’s strength; it lets you dial into the position as confirmation builds and peel off profits in stages.
In AFT8, you configure these modes under the “Position Sizing and Scaling” section of your strategy. Position amounts are defined in the Algo Entry settings, while exit tranches are set up in the Algo Trade Manager.