"Scaling System" of trading wherein trades are routinely added to losing positions based on the premise that they will return to the average. It is a wonderful way to trade IF there is a return to the base line and a fundamental move is not taking place. The problem is that very often there has been a shift in the fundamentals and the price does not return.

I am finding in trading the lean hog spreads there is a fairly strong tendency for the spreads to fluctuate up and down and return. Because of this I routinely scale into and out of spread positions and it has been working if I am careful where i begin to scale and don't mind letting trades hang around for a month or two.

I just now scaled into four more long K/M spreads.

I don't dare to try scaling the futures as out-rights.

Best wishes,

dhm