The chart work you did was great, you took the trade in the right direction with profitable risk-reward.
The worst thing you can do is to let your profit vanish or turn into the loser.
On the other side, you want to give it enough room for reaching the targets you set.
There are a lot of articles that will talk about managing losing trades and what to do after a loss (Things to do after a losing trade).
Very few of them will talk about the management of the winning trade, which is equally important because poor management in either of them will affect your trading performances and at the end, your account balance.
Set multiple targets
The best time to think about your exit is before you are in a trade.
It is time you are most objective and emotionally stable.
That’s the time your money is still not exposed to the live market, and you tend to make way better decisions compared to the ones you make when you have active trade.
The purpose of setting multiple targets is to mark levels where you will close part of your position and book the profit.
If you buy at support, the main target is at the next big resistance.
But maybe the trend will become bearish, and after bouncing off the support, it will reverse before reaching the area of resistance.
Maybe it will find the top on weaker resistance.
That’s why it is suggested to close position partially step by step as it is reaching the main resistance.
Have at least two targets.
The first one has to be at least 1:2 risk-reward.
The second one should be around the main resistance.
We prefer to set between 2 and 5 targets depending on the type of trade and setup conditions.
Depending on the type of trader, on the first target, you should close between 20% and 50% of your position.
Usually, it is suggested to move the rest of your position to the entry point so you will have a risk free trade.
The second suggestion depends if this aligns with technicals, but usually, it does.
Don’t over manage your position
A lot of traders like to babysit their position looking at low timeframes and reacting on every move it makes.
Once you are in a winning position, it is a confirmation you did an excellent preparation, and these are the rewards you are getting.
If the preparation was on high timeframes, there is no reason to manage it on low timeframes.
If your setup was on higher timeframes, the exit should be based on similar timeframes too.
Same apply for day traders who found setup on mid or low timeframes.
Their exit should be based on the mid or low timeframes as well.
Set the alerts at the targets you predefined and once they get hit, you can reanalyze the market conditions and make the decision.
What is wiser to do is to follow your journal and execute the action you set yourself.
If you planned to close a 20% position on a certain price point, close it and let the rest run and wait for reaching the next targets.
Let it breath
If the price starts moving into profit, it doesn’t change the situation too much.
You should stay focused on the next 1000 trades to make it profitable.
This is just one of them, and there is no reason to be too focused on that one trade.
Most traders tend to move the stop-loss to break even because of fear that they will lose the profit.
Losing profit is not easy, but as long as your predefined targets are not met, you stay calm.
Even if it reverses and reaches your stop loss, you are losing what you are comfortable with.
That’s why you have risk and money management.
There will be also trades where the price will be in a loss for some time before reversing and reaching the targets.
Do not expect from the price to instantly reach all your targets after you opened the trade.
The market doesn’t care about you.
It will move when it is ready for that not when you enter the trade.
Moving stop loss to break even without confirmation is nothing but emotional pressure.
If you are doing this, you either risking too much or you learned something wrong in the past that doesn’t let you step up and grow.
The first thing is to unlearn the wrong things and focus on the ones that will improve you.
If the technicals met specific rules, you can and should move the stop-loss to break even.
If you do it without confirmation, the market may reach your break-even point, sweep you out of the market and move in your direction.
You will be right and won’t get invalidated, but your mistake will cost you losing the profit.
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Milos is an independent trader, with a background in journalism and publishing. Nomadic by nature, he’s lived in four different countries this decade. He’s fascinated by Blockchain technologies’ potential to reshape all aspects of our lives. Milos got into Bitcoin while completing his degree and hasn’t looked back since, writing about anything crypto-related. He is the co-founder of the Cryptoaims and he has a strong passion to educate people about this revolutionary technology.