Taking trading profits when they’re available is perhaps the biggest

dilemma that a trader faces – take profits too soon and you could leave too much money on the table, but if you miss the boat, you run the risk of

your paper profits evaporating or even turning into a loss.

When you’ve managed to get a good trade entry and the market has moved favorably for you, if you haven’t got a

pre-planned exit strategy then it’s going to be a difficult thing to get right every time. In fact, it’s near impossible to get your exit (or entry) perfect even

if you’ve done all the right things.

But without a plan of how to exit your trades properly, every decision can have a degree of subjectivity to it –

and this is when a trader can fall prey to overthinking a situation and

emotional uncertainty.

Both missing the moment you ‘should’ have exited a winning trade and taking

needlessly small winners, can have long-lasting emotional repercussions.

The uncertainty of not knowing which decision will be right can bring back the past pains of seeing early exited trades continue on without looking back and having big winners turn

around and end up losers.

This isn’t a nice feeling as I’m sure most traders will attest to. Having a big

winner come all the way back and either turn into a scratch or even a

loser is a painful experience, particularly if it wasn’t part of your

plan.

It can induce a feeling of regret over profits that weren’t realized and can

lead to a trader acting more quickly in taking their profits in the future.

Through the adverse experience of a big winner becoming a loser, the trader then starts to prematurely

snatch their profits before the market has realistically given them a good reason to exit their winning trades.

Inevitably they see more and more of their trades continuing way past where they have exited. This tends to leave a trader feeling foolish and wishing they had the huge winner that they ‘should’

have had if they’d just managed the position ‘correctly’.

Without a proper pre-planned exit methodology, experiencing the

consequences of both holding onto a trade too long and watching the

market thunder past your premature exit, leads to a feeling of uncertainty.

The uncertainty of not knowing what the correct course of action will be in

order to avoid a negative outcome (and of course, achieve a positive one)

can make a trader freeze.

Taking an early exit has led in the past to poor outcomes and so has holding on to a trade. So a trader can face a situation where they have a position

that’s printing positive, but in terms of whether to exit or hold on a bit longer,

neither choice is preferable –

and this in itself contributes to choking at the most important moment.Acting decisively when sufficient information

is available is a key attribute of successful traders. If you have the right

information and the market meets your criteria for an exit, then that is

exactly what you should do.

Having a pre-planned method of exiting trades before you take them

can help you to avoid errors and assess how effective the method really is.

There are many ways that you can take your profits and part of what makes

Netpicks PTU Trend Jumper system so powerful is that it incorporates several

of them.

Target levels Fixed target – exit trade at a set number of ticks, but needs to be based on the behavior of the specific product you are trading.

Dynamic target – this can be based on the size of a setup or generated as a retracement/extension of an important swing for example.

Market levels – using market support/resistance levels as profit targets for your trade can be a good method if the levels are identified properly.

Profit stop triggers Trailing stop – Market levels, trend lines or moving averages can all be valid places to exit if the market reverses back through them.

Reversal activity – Exiting a trade on specific reversal activity can help you to get yourself into better synchronicity with the market. A strong rejection of an important price level can be a good cue to exit for example.

The flexibility that trading a greater number of contracts gives you should

not be underestimated.

Firstly, it gives you a number of options for your exit – and this is

extremely important as I’m nearly certain that no trader has the ability to

get out at precisely the point the market turns on every single occasion.

Secondly, the nature of scaling out of a trade for profit means that risk

diminishes very quickly indeed.Don’t watch good profits vanish into thin air – make sure that you take something when you have a trade well onside.

Trading is a marathon not a sprint and whilst taking smaller profits (not small) will reduce the size of your winners, it will improve your consistency and this is what will make you successful in the long run. A smooth equity curve leads emotional stability as a trader and to

bigger size.

No matter what you do as a trader, unless you have a consistent approach

for taking profits, you are likely to struggle. And remember, until you make that cash register ring your

profits are not real.