Scaling In and Out of a Trade: Average Price and Total Risk

Scaling in and out of a trade means opening or closing a position in parts instead of all at once. Every add or partial close changes your average entry price and your total risk, so both must be worked out again after each step.

Module 10 · Lesson 1 of 5

KCM Academy Editorial Team
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Last updated 19 October 2026

What you'll learn

What does scaling in and out of a trade mean?

Scaling in and out of a trade means changing the size of a position in steps: scaling in adds volume in parts, and scaling out closes volume in parts. Each step is a separate deal at its own price, so every step gives the position a new average entry price and a new total risk.

Scaling is how traders manage size: it builds or reduces exposure in steps, with the risk recalculated at each one. This lesson is part of Module 10, Trade Management.

Key terms

How do you calculate the average entry price?

The average entry price is each deal's price multiplied by its volume, added together, then divided by the total volume. Bigger deals pull the average further towards their price. In a netting account, MetaTrader 5 recalculates the position's open price as this weighted average when you add volume.

Average entry price = (price 1 × volume 1 + price 2 × volume 2) ÷ (volume 1 + volume 2)

With synthetic prices on EURUSD:

  1. You buy 0.10 lot at 1.08500.
  2. You buy another 0.10 lot at 1.08700.
  3. Average = (1.08500 × 0.10 + 1.08700 × 0.10) ÷ 0.20 = 1.08600.

Risk is now measured from 1.08600, not from your first fill.

How does scaling in change your total risk?

Scaling in raises your total risk unless you move the stop loss closer to the new average entry price, because more volume now sits above the stop. Total risk = pips from the average entry to the stop × pip value of the whole position.

Synthetic numbers follow. On EURUSD, 0.10 lot is worth about $1 per pip and 0.20 lot about $2, as the lots, pips and pip value lesson in Module 2, CFDs Explained, explains.

Step Position Average entry Stop Pips to stop Total risk
First entry 0.10 lot 1.08500 1.08250 25 $25
Add 0.10 lot at 1.08700, stop moved up 0.20 lot 1.08600 1.08450 15 $30
Same add, stop placed to keep the plan 0.20 lot 1.08600 1.08475 12.5 $25

Moving the stop up to 1.08450 still leaves $30 at risk, $5 more than planned. To stay within $25, the combined stop must sit no lower than 1.08475. That first $25 comes from position sizing, which sets your risk before the first entry.

Scaling in vs averaging down: what is the difference?

Scaling in adds to a position that is moving in your favour, while averaging down adds to a position that is losing. The click in MetaTrader 5 is the same, but averaging down puts more money on a trade going against you, and if the stop stays where it was, total risk grows.

The mirror case, same synthetic numbers:

  1. You buy 0.10 lot at 1.08500 with a stop at 1.08250. Total risk: 25 pips × $1 = $25.
  2. Price falls to 1.08300. You add 0.10 lot there.
  3. The new average is (1.08500 + 1.08300) ÷ 2 = 1.08400.
  4. With the stop still at 1.08250, it is 15 pips below the average. Total risk: 15 × $2 = $30.

The average entry looks better, but the loss at the stop is now $30, not $25. Move the stop lower to 1.08150 and it becomes 25 × $2 = $50, double the plan. Whichever way you add, the planned total risk is the number to protect.

How does scaling out work?

Scaling out closes part of a position and leaves the rest open, so less volume is exposed to price from then on. The closed part's result is fixed in either direction, while the open part still moves with price and still needs its stop.

Back to the scaled-in 0.20 lot at 1.08600, stop 1.08450. Price reaches 1.08900 and you close 0.10 lot.

Scaling out works on a losing position too: closing part fixes part of the loss and cuts the volume still at risk. Moving the stop to entry afterwards is covered in the break-even stop lesson.

MetaTrader 5 lets you close part of a position:

  1. On the Trade tab of the Toolbox, right-click the position and choose Close Position.
  2. Enter the volume you want to close, such as 0.10 of 0.20 lot.
  3. Click the Close button and check the volume that is left open.

Partial closes with a trailing stop are covered in the trailing stop and partial close lesson.

A rising EURUSD price line with a buy of 0.10 lot at 1.08500, a second 0.10 lot added at 1.08700, the average entry of 1.08600 and the moved stop at 1.08450 as dashed lines, and 0.10 lot closed at 1.08900 with 0.10 lot left open
Scaling in adds volume at a new price and moves the average entry; scaling out closes part of the position while the rest stays open with its stop.

How does scaling work in MT5 netting and hedging accounts?

In a netting account, every add merges into one position with one average price; in a hedging account, every add opens a separate position with its own price, stop and take profit. Your broker sets the mode for the whole account. The netting vs hedging lesson shows how to check which one you have.

Netting Hedging
After adding 0.10 lot One 0.20 lot position at 1.08600 Two 0.10 lot positions, at 1.08500 and 1.08700
Stop loss One stop for the whole position A stop on each position
Scaling out An opposite 0.10 lot deal, or a partial Close Position Close one position, or part of one
Result of closing 0.10 lot at 1.08900 $30, measured from the average $40 if you close the 1.08500 position, $20 if you close the 1.08700 one

In netting, MetaQuotes notes that a position's Stop Loss and Take Profit follow its latest order, so check both levels after every add. In hedging, the overall result is the same; only the bookkeeping differs.

How do the ways of entering and exiting compare?

A single entry fixes your average price and risk once, while scaling in, scaling out and averaging down each change them with every deal. Each extra deal also pays its own trading costs. The table uses this lesson's synthetic example.

Approach Average entry price Total risk Costs
Single entry The one fill price Set once by size and stop ($25) One deal to open, one to close
Scaling in Moves towards the current price, away from the stop Grows unless the stop moves up ($25 to $30, or $25 with the stop at 1.08475) One more spread and any commission per add
Scaling out No new average; what is left keeps its entry price Falls as volume closes ($30 to $15) One more closing deal per part
Averaging down Moves towards the current price, closer to the stop Grows ($25 to $30, or $50 if the stop is moved lower) One more spread and any commission per add

What should you check when scaling in and out?

Check total risk after every deal, because each add is a small step while the loss at the stop is measured on the whole position. Skilled traders recalculate the average entry, the pips to the stop and the pip value of the full position each time, then compare the total with the risk they planned before the first entry.

Try it on demo

On a demo account in MetaTrader 5, buy the minimum volume of EURUSD with a stop loss, then add the same volume a little later. Work out the total risk from the new open price on the Trade tab. Then close half the volume with Close Position and check what is left. The pip value calculator helps you check each step.

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Quick check

  1. Scaling in means
  2. You buy 0.10 lot of EURUSD at 1.08500 and another 0.10 lot at 1.08700. The average entry price is
  3. A 0.20 lot EURUSD position averages 1.08600 with its stop at 1.08450. At $2 per pip, the total risk is
  4. Adding to a losing position while leaving the stop where it was
  5. In an MT5 netting account, a second buy on the same symbol

Frequently asked questions

What is pyramiding in trading?

Pyramiding is scaling in on a winning position: each add is made after price has moved in your favour, and each one pulls the average entry towards the current price. The stop is moved up with each add so total risk stays inside the plan.

What is the difference between scaling in and averaging down?

Scaling in adds to a position that is moving in your favour; averaging down adds to one that is losing. Averaging down raises the loss at the stop on a trade already going against you.

Can you partially close a trade in MT5?

Yes. Right-click the position on the Trade tab, choose Close Position, enter the volume to close and confirm. In netting, a smaller opposite deal also works.

Is averaging down a good idea?

Averaging down adds volume to a trade already going against you, so it raises the loss at the stop and uses more margin. In the example above, the same add took the loss at the stop from $25 to $30, or $50 with the stop moved lower.

Why do traders scale in and out of trades?

Traders scale in to start with smaller exposure, and scale out to fix part of the result while keeping part of the position open for a further move.

Sources

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