Why do they do it?

Phantom also says that scaling is pointless for the short term trades you and I do on ES - it's all in and all out according to that wisdom.

Ergo, it's down to knowing your 'edge' and when to push it when circumstance dictates.

I've done some backtesting on scaling in. Do this if you want (like the Turtles) and you'll make more money when market conditions are right, BUT overall your drawdowns will be larger.

If a risk based measure of a system is the return relative to the drawdown, I've not found that scaling in is better (the opposite, in fact).

I don't know about scaling out.. my guess is that it doesn't help because for those rare 5R winners, you'll have nothing left in it at the end.

This is the case for a longer term (i.e. using dailies) trend system .... I don't know how it applies to intra-day techniques.

That's an awkward one because for scaling in to be correct you would also need to be able to add onto a trade, which actually lowers your average.
1/
Imagine you short gold at 1300 with 50% of a position, it goes against you, you addon your second half at 1350 and the market starts to move with you. All good. You've averaged a 1325 entry and can now manage it.

2/ You short gold at 1300 with a 50% position and it immediately goes your way. You now have a winning position but it's half of what you would normally win with a full position.

3/ Imagine you short gold at 1300 with 50% of a position, it goes against you, you addon your second half at 1350 and the market goes further against you. You've averaged a 1325 entry and then stop out at 1375.

By doing the above you are making sure that your losing positions are always full positions but your winning positions might either be 50% or 100%.
So, the win ratio is skewed towards losing more.

Obviously, it';s more complicated than that due to volatility, usualy retraces at some point, etc. etc.

5R can be possible even on swing trades but I suppose it's tricky due to the whippiness. Intraday 3R or more is doable with scaling out.

Sorry, by scaling in I mean adding to a position as the market goes in your favour.

Aha...gotcha. So basically you enter a small position to find out what happens and then as you are proved right you add on more...but it does lower the average a bit.
Probably one of the more conservative methods and got nothing against that...have used it a few times on trades I'm not sure about. It still leads to a few times where the trade moves against you and you think of averaging in the other way.
You have to be careful on the risk as well when lowering the average.

I think when you're taking 1-6 pts on ES, scaling in makes little sense. On swing trading, I can see on ES you'd have to be working the daily to make any sense of that - I can't see scaling on 4H working that well as when it chops, which it does every now and again, you're probably going to get a good drawdown.

Think about kurtosis in the distribution of returns and you'll understand exactly why he says this.

By implication, does that mean that short term trading is doomed to failure?