Should you ever exit a trade before it hits your take profit? I get that it messes up your probability but wouldn’t it be worse if the trade turns around? On one hand I know that this is probably fear speaking but on the other hand, some profit is better than no profit.
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Take it step by step.
- Why are you setting a TP? Its not compulsory so what is its purpose?
- How did you find the best level for the TP? This should come from TA, not a simple ratio with the stop-loss distance and not a fixed standard pip count.
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It really depends on your personality. To become a successful and consistently profitable trader, you really need to nurse your winning trades. I never use the T/P, because no one knows what’s going to happen - but I keep an eagle eye on the price movement. Which could be my downfall to do exactly what you’ve said.
My best winning trades have been when I’ve left them alone, but FOMO is always the siren calling. I would suggest you always take a profit when the market candles are retracing, as you can always re-enter at a later point if and when the trend continues.
Or you could close 50% -70% of your trade and let the balance run, which, IMO, relieves emotions as you’ve made a profit and have the chance of making more. That works for me.
Of course, pro traders will add to a winning trade more often than not if the chart scenario is still heading in the same direction as anticipated. They will move up the S/L to near breakeven to maintain the same risk.
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This is a very good question, sometimes I hold positions without TP and then end up closing on SL.
Exiting a profitable trade is the hardest decision in trading. Sometimes, in the absence of a better rule you just have to grab the money and run - simply, you could close because price has suddenly speeded up, or because price has suddenly slowed down: neither is a fantastic guideline but both work better than nothing.
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yes , completely agree with you , got some fine lines with exact knowledge
If you want to become a successful trader, you have to take the right decisions at the right time.
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Of course, you should exit some trades before TP is reached! Sometimes there may be a candle indicating a strong reversal, or the chart changes in other substantial ways. These are good reasons to exit the trade.
Other times, the momentum may be really strong when you reach TP, and in those cases, perhaps you should consider moving your TP and follow the momentum.
This may sound easy, but the most difficult challenge will be to deal with your emotions. Are you exiting (or moving your TP) for the right reasons (what the chart/analysis says) or due to fear or greed?
One more thing: Perhaps what I say is related to which timeframe you trade. I wouldn’t have made changes often if I traded lower timeframes. However, I trade Daily and 4H, and I believe it makes much more sense then.
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There will be many times to exit early, just as there will be many times you should ride it out. This is where experience and your trading plan will save you from blowing up.
Thanks guys, once again really great advice. This forum is very helpful.
You can exit a trade after
1.reaching your target
2.If you use support and resistance you just see either support or resistance break
3.if you use supply and demand you just see price break supply or demand on the same timeline you use to trade
4.if you use supply and demand you just see price hit the higher timeframe supply or demand than you use to trade
5.when you repeat to do an analysis and you discovered that you did it wrong so you close it to prevent further damage
Exit a trade where price is probably going to offer you a chance to repeat the trade.
Exit a trade when a trade has already touched the TP line or SL line. Otherwise, hold it according to the signal.
Thank you for asking this question. Think I have a challenge here and it cost me.
I appreciate the responses share.
You have to exit a trade when you see the trade is going to lose or already in loss or there is no possibility to move to the expected direction.
Personally I think it depends on what’s going on in the market at that time. If there’s a pending news release that could wipe out your profit in under a minute then taking profit early would be sensible. If your not far from your TP in a bullish trend but the market starts to show bearish pressure and your already 1-2 risk to reward up but your target was 1-3, then closing the trade for a 1-2 can make sense, especially if it helps you hit your overall daily target. We as traders have to adapt to the current market conditions so sometimes we have to let the trade run, close early, move SL to BE etc 
Hope this helps. I’m still learning so any feedback on my comment would be appreciated
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In my opinion, no pro here, but I think for example if your trade isn’t even reaching 10 pip profit then it wasn’t a good trade to begin with. I often look at the most previous support and resistance on the higher timeframes and gauge my tp on that. It’s usually anywhere from 10-100 pips but really just depends.
I think if you keep watching it you will psyche yourself out and close it too early so don’t watch it!
Close a trade when the trade hits the target level or if you think a trade to go lose, you can close it.