How to Scale In During Strong Trends

Identifying a strong trend is one of the most satisfying feelings in trading. The stock market will move normally in your direction, and every dip feels like an opportunity to get in. But for every opportunity, there is an obstacle. Should you commit to your entire position immediately, or start to build it piece by piece? This is where the technique of scaling in is beneficial.

Scaling in during strong trends gives you an opportunity to increase your position as the market confirms your thinking, but it also limits your risk of being wrong from the start. It is a healthy contradiction of confidence and caution.

What is scaling in? 

Scaling in means to take the trade in increments instead of simply opening the entire position all at once. Instead of purchasing one lot of EUR/USD all together, you might start with 0.3 lots and add another 0.3 lots as the trend continues. Finally, the last addition of 0.4 lots would be made once it becomes obvious the breakout is happening.

This technique translates especially well with strong trends, where that momentum builds cumulatively over time and you can move in and out multiple times well after the trend has begun.

Why scale in during trends?

Strong trends can go on for longer than most traders anticipation. Scaling in allows for more range by allowing you to participate without getting locked into what might be a less than ideal spot.

In additional to the increased position size, scaling in is beneficial from the psychological perspective as well, in that you start very small and don't add too quickly.As the price action confirms your bias, you add more to the position and more to your confidence. 

A practical example  

Let’s say EUR/USD is clearly in an uptrend, breaking above major resistance. A trader wants to go long but is hesitant to risk his entire size at once. He scales in by starting with a small size at the breakout.  

As the price curls back and makes another bounce higher, he puts in more size. At a later point, he adds on again when there’s strong momentum going back to the upside in the price. When he finishes, he’s holding onto his full intended size but every piece he added was on the premise that the trend was real. 

Had the trade failed early, his loss would have been smaller no matter what since the size was small. 

How to scale in successfully  

Here are two simply methods that traders usually utilize:  

Breakout scaling: Put in a small size on the breakout, and then add more on each retest or new high.  

Pullback scaling: Put in a small size on trend start, then add to positions when price pulls back to support (in an uptrend) or resistance (in a downtrend).  

Either way, scaling in only works if you can be patient and disciplined—don't chase every candle, but wait for confirmation of trend before adding.  

Quick guide for scaling in  

Common problems to watch for  

Scaling into positions can be quite powerful—only if you use it effectively. A lot of traders fall into traps like:  

Adding too soon: Building their full position before distinguishing if the trend has actually proven itself.  

Ignoring stops: Building a full position and not managing their opportunity cost of increments risk—adding size without adjusting risk protection (a mistake which amplifies risk).  

The key to rule binding is to have a plan. You should know when you will add, how much you will add, and where your stop-loss will move. The downward trend has virtually no limit when you don’t know when/how much to weight your scaling in with size, which leads to reckless averaging down instead of adding based on an intention.  

Final thoughts  

There is really a balance scaling during strong trends—you’re more rewarding a trend than trying to be perfect. Tailoring profit, via position size and risk, will be more engaged at the start of that trend when you make small position sizes into more sizes while confirming the trend, which puts you in a position of monitoring the trend levels with a higher chance of accuracy. 

It’s a technique that has patience and momentum at its edge, allowing traders to grow profits while maintaining a managed risk approach to USD per unit of valuation.  

If you want to learn more about practical strategies like that of scaling in, I encourage you to visit the Learn section on Wikilix. It's the place where concepts like that become real, as they turn into tools one can apply to yourself from upon reading.