Take-profit is harder than stop-loss, because the stop-loss cuts off fear, while the take-profit cuts off greed. The better the market is, the less you want to...
sell. The moment it pulls back, you regret not selling earlier. I’m sharing the batch-wise take-profit method I’ve been using.
[Three-stage] First segment: when it reaches the first target level (for example, 1x risk-reward), reduce the position by 1/3, take some profits off the table,...
At this point, this trade won’t lose money anymore, and my mindset instantly changes. Second segment: when it reaches the second target level...
(For example, 2x the risk-reward ratio) minus 1/3. Third segment: the remaining position uses a trailing stop, and if it breaks below the moving average...
or the previous low, then exit and let the profit run by itself.
[Why this way] Going all-in and exiting too early will make you slap your forehead. Holding all-in often means you ride an elevator back to the days of going back to square one.
The essence of scaling out is taking the impossible task of “selling at the highest point” and breaking it into three not-bad decisions.
【Key move】After cutting down the position, raise your stop-loss to the cost price—this is the legendary “free trade.”
The profit you hold is most afraid of being turned into a losing position bit by bit.
What do you think? Share your experience in the comments.