when to walk away from a trade thats slightly winning but not at target
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practical question. trade is up 1R, my target is 2R. price has been slow-grinding upward for 3 hours. structure says target is reachable but momentum is fading.
options:
- close at 1R, accept the partial win, move on
- trail stop to break-even and let it ride to target or stop
- trail stop to lock 0.5R and let it ride
- add to position because still trending (but tired)
i used to default to #1 (taking the win). lately ive been doing #2 and watching half my trades come back to break-even after hours of being up. what's actually optimal?
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tracked this exact scenario across 200 trades. closing at 1R captured 1R every time. trailing to break-even gave me an average of 0.7R because half came back. trailing to 0.5R lock gave 1.1R average. for my style, locking partial profit then letting it run was optimal. but it depends on your win rate and how much your wins normally exceed your initial target.
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+1. partial-lock approach is mathematically better than pure trail to BE for most strategies. you give up some R from runners going further but you protect a substantial portion of what you'd captured. less psychological regret too.
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what does 'trailing stop' mean in practice? like an automatic stop that follows price?
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yes. trailing stop = stop loss that moves with price in your favor but doesnt move against you. example: long entry at 1.1000 with stop at 1.0950. price moves to 1.1080. you trail stop to 1.1030 (BE+30 pips). if price drops, stop triggers at 1.1030 locking 30 pips. if price keeps going up, you keep trailing higher. mechanical way to protect profits while staying in trade.
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i took it further: tkae 50% off at 1R, move stop on remaining to BE, let the rest run. captures the partial win, eliminates downside on the remaining, lets the runner go to full target or beyond. been my consistent approach for 2 years.
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i'll push back. for systematic traders the answer is whatever your backtested data says. for discretionary traders the answer is whatever lets you sleep without revenge trading. both are valid but the question shouldnt be 'what's optimal' in abstract, it should be 'what optimizes my overall edge expression'.
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partial out. let runner go.
the regret of that taught me to take partials. half off at 1R, runner with BE stop on rest. saves me from the BE-then-target whipsaw
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