Hi guys! I’m new to the forum. Let’s get a healthy discussion going on taking partial profits. I know the topic have been discussed before, but I would like to probe for fresh perspectives.
Is it reasonable to apply taking partial profits strategy to swing trading?
My goal is to achieve 5-10% consistent monthly profit on my account.
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Not something I ever do. If the position is in profit and still valid by its TA I would consider making it bigger, not smaller.
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I do not want to burst your bubble, but even the pro traders would not expect to meet your goal month in and month out. If you make 20+% per annum you’ll be lucky.
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Steve, you’re right, and I would say the same thing. But I don’t understand why.
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it wouldn’t be, for me
adding to winners makes much more sense to me than reducing from them
as such respected trading authors as Van Tharp, Tushar Chande and Michael Harris go to such lengths to clarify in so many standard trading textbooks, it’s an inescapable reality that taking partial profits means that your position-size is at its biggest exactly when your risk is at its highest, i.e. right after you’ve opened the trade 
you might want to think carefully about that, perhaps, before deciding whether it would be reasonable for you?
this thread will help you, if you read it carefully:
https://forums.babypips.com/t/pipcrawlers-thoughts-on-setting-newbie-expectations/17006
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Wow! Thank you! I have one of Van Tharp’s books, but it is mainly focused on psychology. I will track down the others. You know, I’ve never thought of risk being highest in the beginning. I trade on daily graph, and the opportunities are few, so starting small and scaling in sounds reasonable. I shall read into that.
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Hey, welcome to the forum! Taking partial profits in swing trading can be a smart strategy. It allows you to lock in gains while still leaving some room for further growth. However, it’s crucial to have clear exit criteria and a risk management plan in place. Achieving 5-10% consistent monthly profit is an ambitious yet achievable goal. Remember, discipline and patience are key in swing trading. Let’s hear from others and get this healthy discussion going! Share your thoughts, everyone
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psychology never grows within very short time , need a long time practice first of all. so patience is needed
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yes - those are his later books; the one i was thinking of is called Trade Your Way to Financial Freedom, but the Michael Harris book (Profitability and Systematic Trading) will probably be more helpful in this context
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I think it depends. Just like how in math you can verify if a formula is correct, the same is true for ‘true or false’ statements. I believe if you can explain how taking partials is a good idea, and you’ve covered all your bases, it’s probably a good idea.
I’m a breakout trader. I expect more often than not for my trades to go at least 1:1 in my favor. However, this being the case I still face losses.
Here’s my formula on taking partial profits:
At 1:1, I take half off the table (to a breakout trader 1:1 is the most common outcome)
Then put SL to B/E
(So, at 1:1, 0.50% profits are taken off, and 0.50% position still running, SL to BE.)
The 0.50% profits taken aren’t to be seen as profits but rather recovering one’s losses.
Every time I enter a position, The first thing I do is take some off the table for that one day I suffer a 1% loss.
The remaining 0.50% of the position is to be held for 24 hours, risking B/E.
(There is further instruction for this position, but that isn’t important in this conversation)
I make money on the nights when Preparation and Opportunity meet Luck.
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First thing, 5-10% it’s a bit unrealistic. I would say 1-2% is the norm. 3-5% on a good month.
Next, regarding on taking partial profit, this topic is very debatable in my opinion. If you tested it and it works, then good for you. To me, taking partial profits is a bad habit. It might make your account looks nice now but in the long run it won’t make money.
In a nutshell, your money management strategy should:
- Minimized as much risk as possible so that if you’re encounter losses today, it won’t be a sudden death.
- Your strategy should tell you when you should have a bread and butter trade (2R-3R) and when you should have a home run trade (5R and above).
- Once your strategy tell you what to do, then do your best to follow it especially when you holding a profitable trades. It would seems very hard to hold it long enough and it might make you feel like you need to cut it now but you need to learn to hold long enough so that it could play out by itself. You may reduce your risk for a bit (trailing stop or something) but you must try to hold it long enough. I really have to emphasize on this.
The bread and butter trade would cut your losses for a bit and maybe even give you some money to pay bills. But, the trade that really going to make you crazy money is the one that you can hold long enough so that it can be a home run trade. Your equity curve would look like a range build up and then it breaks and surge new high. Then build up again and then surge. Haha.
Focus on monthly percentages is like dying a thousand cuts. My advice to you is only to focus on getting reasonably good trade setups that do not appear often. When I removed the % expectations on monthly return, my equity curve improved.
Consistent trading involves discipline, following your trading plan not focusing on monthly returns. but you will survive in this game of trading if you consistently make or take profits.
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I think you have posted to the wrong person. I don’t have any monthly percentage targets.
Of course it is lol, one of the main ideas of Risk Management when swing trading. You gotta pay the trader. Btw also a great way of putting BE. Just fix 50% of the trade at 2.2R and you got yourself a risk free runner.
This is the best thing ive heard in a while. I honestly support taking partial profuts because when things turn on me I can still be profitable.
taking “partial profits” is a different game, depending on if you are subject to FIFO rules or not.
me personally, i have always found that taking partial profits means that i will end up with less profit at the end of the game.
my current position has been open for less than a day and my target is 5% profit.
If your target is 5-10% a month i think taking partials is advisable, its not an aggressive target and by taking partials you are getting to your target faster.