Scaling out means exiting a trade in pieces: part of the position at a first target, the rest at a second target or on a trailing stop. It trades a little of the best-case result for a much smoother set of outcomes.
Average exit and P&L
average exit = Σ (exit price × exit size) / Σ exit size
gross (long) = (Σ exit price × size − Σ entry price × size) × contract value
Example
Long 2 contracts of ES at 5,000 with a stop at 4,990 (risk 10 points × $50 × 2 = $1,000, so 1R = $1,000). You sell 1 contract at 5,010 and the other at 5,030.
The average exit is 5,020. All out at 5,010 would have been +1R; all out at 5,030, +3R; the partial exit landed in between with the first half banked early.
Why traders do it
- A partial at 1R pays for the risk, which makes it easier to hold the rest through a pullback.
- It raises exit efficiency without trying to sell the top.
- It reduces the number of trades that were up 1R and finished as losers.
The cost: on the trades that run to the far target, the first half earned less. Over many trades, the MAE and MFE of your own history tell you whether that cost is worth it.
In SetupBook
Add as many exit fills as you took; each has its own price, size and time. SetupBook computes the average exit, the P&L and the R from all of them, and a trade with only part of the size closed stays in the open positions strip until the rest is out.