I have noticed a pattern of wanting to close positions while in positive territory but before they hit their target profit. I have to force myself to allow them to run the course and sometimes tighten up stop losses and profit targets if the trade has been open for several days (I am a swing trader). This has obviously led to some trades being stopped out (regardless if I moved the stop loss price or not). has anyone else had this problem and how did you overcome it? Thank you in advance!
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Its the most difficult problem in trading - when to close a winning trade.
It might be as well to go back to the very starting point. Are you forced to find a profit target? How do you identify the price?
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I think, back testing can help you to improve your trading skill; running a winning trade for the TP level is important!
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I have a rules based strategy for setup conditions, the entry price (candle stick patterns), stop loss and target profits all defined before placing a trade. So I donāt find myself forced to find a profit target as they are always a previous level of value (support or resistance). I have a decent amount of patience in waiting for decent setups that align with with risk to reward ratios as well. So I donāt feel like I am forcing trades just to trade (for the most partā¦) Itās that when I see some profit, I want to close the position to take the small win and avoid a possible reversal. Maybe I should focus more on trailing stops, or partially closing my positions while positive. Thoughts or opinionās? Thanks!
Agreed. My trading plan is one in which I could fairly easily locate setups based on historical data. Honestly, and this is going to sound terrible. But the time I need to commit to back testing seems intimidating. I know it has to be done. Itās at the top of my list of things I need to do in order to become successful at this. I am just gonna have to stick it out and do it so I can get the confidence I need to allow them to run to TP based on the positive expectancy of wins vs. losses on a given strategy.
This sounds completely rational.
But there might be problems with such a standard approach. Personally I have too little faith in support/resistance levels to use them as SLās or TPās. But letās face it, the only real time you should let your winners run is when they have a direction and some momentum to run with, i.e. you entered with an existing trend or a trend formed with your trade direction after you had entered.
Its extremely optimistic to believe that its possible to consistently enter trends that havenāt formed yet. The conclusion therefore has to be that if you want to let your winners run you must enter trend-following positions.
This is the real meaning behind the saying, āLet your winners runā. Saying āJust follow the trendā just isnāt sexy enough to sell any books.
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I find if I put in a stop once Iām in profit, to protect my capital (i.e if stopped triggered will still give me small profit) takes the pressure off greatly, then I usually move my stop (slowly) up or down once the trade has broken through whatever moving average on the M10, H1 or D1 chart. This means moving the stop first to Ā£1 profit, then Ā£20, then Ā£100. Then whatever. But Iām guessing you already do this anyway.
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I am not already doing this. Thanks for the advice. Protect my position, I like it.
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I am not a swing trader, so please excuse me for butting in.
I always find the notion of āprofit targetsā somewhat strange and potentially limiting, unless one has a crystal ball. I suppose you can use S/R to some degree but how about MACD? In many tests MACD has come out as the most reliable indicator and it does show loss of momentum in a trend. Perhaps if you feel tempted to get out of a trade check MACD and see how the momentum is going.
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Whatās your preferable time for support/resistant levels? In my trading, I use daily time frame for support/resistant!
I day trade (5min - 1min) only indices and the main levels of support/resistance that I observe (not use as a ridged target) would be daily pivot points.
Of course, letting the winners run is not the end-game objective, it is a stepping stone towards pyramiding your winners, which is where the real money is made.
The objective for serious trading is pyramiding. Which means you have to run winners. Which means you have to follow trends.
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i usually TP with higher timeframe RSI ,or as long as theres profit.itās just personal ,i wonāt allow my winner turn into loser ,thatās a disgrace to me .tits are tits ,so are winner .
The say it more difficult for traders to accept, winners that turn into to zero profit (or maybe a negative)Then just a losing trade .
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Yes - this is psychology playing tricks, itās like giving away your prize. 
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I also canāt deal with regular losses. Thatās why Iāll happily go for the occasional loss of many thousandsĀ£ then death by multiple daily losses of 10Ā£ās. My psyche is my psyche and itās unchangable, so I need to do work-arounds, like getting a kid to eat broccoli by telling them they are a giant eating treesā¦
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This happens because you have no strategyā¦
You havenāt done any backtestā¦ nor you are keeping a journal of your trades
This business is all about probabilitiesā¦ and you need a sample size in order to calculate probabilities.
Your strategy should not only contemplate where you get inā¦ Also It must contemplate the rules for breakevenā¦ stop loss and profit taking
You must have a sample sizeā¦ to have an expectancy of how many of your trades Will probably hit SLā¦ how many BEā¦ TP1ā¦ TP2ā¦ etcā¦
Right now youāre just reacting to What you see in the charts and your are trading with FOMO emotions. Not good.
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Winning or getting a positive result in trading is the result of long work and learning. Otherwise, getting a positive result is quite difficult.
Yes, I had the same problemā¦ Try lowering your timeframe, your target will be closer to your entry and might geht hit.
Another useful tip to me was just letting the trades run. Meanwhile I only open positions at the late afternoon or just before asian sessions starts (I live in Europe) and check them when I woke up thr next day by the end of asian session. Mostly TP is hit, sometimes SL.
Trade and forget.
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yes this exactly, taking half profit off to lock in profits and moving your stop loss to break even and let it run if you think it may continue in the same direction. Iām still learning all of this myself but I believe the ATR indicator is very valuable in telling you what your take profit and stop loss should be. 9/10 times I place my trade, donāt look at it for a few hours and it will hit my take profit
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