Hi RTs,
I hope this will generate some relevant discussion
on the pros and cons of scaling out of a trade as opposed to closing a position
completely on reaching a target. So to those who have any inclination to share
their reasons/experience with one or the other...
1) Do you take profits (or tighten your stop) at
one or more targets on part of your position, and let the remainder ride,
or
2) Do you prefer to be completely flat at some
pre-determined target?
3) Does it depend on the timeframe you yourself
trade, e.g., do you do it one way when daytrading and another way when taking
a swing trade lasting days or weeks?
4) Does it also depend on your entry method/system,
e.g., whether you you use one setup/trigger or another, or perhaps whether you
scaled into a trade?
I've read/heard a couple of well known
author/traders argue for one way or the other, and they disagree on
whether profitability is enhanced by one way or the other. I also
realize that it can be more stressful for some traders to be in a profitable
trade than to hold a losing position, so it may be a matter of relieving some
stress to take partial profits as a trade goes their way. Also, one may change
one's mind on which exit strategy to use, as one progresses/succeeds
as a trader.
So, if anyone would care to take the time to
explain their reasons for their preference(s), I think it would make for a
decent give and take.
Regards,
DC