The Exit Psychology Problem
Managing winning trades is harder than finding them. Many traders enter great setups but exit poorly, leaving money on the table or giving back profits unnecessarily. Exit management requires discipline to hold winners and wisdom to know when to take profits.
Three Exit Mistakes Most Traders Make
Mistake 1: Exiting Too Early - Fear of losing profit causes premature exits. After 20 pips profit, a trader exits hoping to "lock in." Meanwhile, the trade goes to 100+ pips.
Mistake 2: Exiting Too Late - Greed makes traders hold too long. A 100 pip winner becomes a 50 pip winner due to waiting. Missing the exit window.
Mistake 3: Inconsistent Exit Rules - Each trade is exited differently. Some trades hit take-profit, others are manually exited early, others are held too long. No system.
The Partial Profit Exit Strategy
The best exit approach uses multiple take-profit levels:
- Target 1 (1:1 RR): Exit 25% of position. Lock in profit equal to your risk.
- Target 2 (1:2 RR): Exit another 25%. Now 50% locked with 2x profit.
- Target 3 (1:3 RR): Exit another 25%. Move stop to breakeven on final 25%.
- Final 25%: Let it run with trailing stop. Capture "homerun" potential.
This approach guarantees minimum 1:1.75 RR while allowing for larger winners.
Exit Timing by Trade Type
Scalp Trades (5-20 pip targets): Exit at predetermined target (no flexibility). Scalps require quick execution and exit discipline.
Day Trades (50-150 pip targets): Use partial exits strategy above. Lock profits at 1:1 RR, let remainder run.
Swing Trades (100+ pip targets): Hold winners as long as structure supports. Move stop to breakeven after 50% RR. Let winner run.
Trailing Stop Strategy
After your trade moves meaningfully in your favor, use trailing stops:
- After 50 pips profit: Trail stop by 30 pips
- After 100 pips profit: Trail stop by 50 pips
- After 150 pips profit: Trail stop by 75 pips
Trailing stops let winners run while protecting profits. If reversal happens, you're already out with significant profit.
The Psychology of Holding Winners
Holding winners is psychologically harder than it seems. As profit grows, fear grows:
- "What if I hold and it reverses?" This fear makes traders exit early
- Solution: Commit to your exit plan BEFORE entering
- Stick to your plan. Don't modify mid-trade
- Remember: If it reverses after your exit, that's okay – you already had profit
Real-World Winner Management Example
You enter EUR/USD at 1.2500 with 50 pip stop (entry plan completed). Your targets: - Target 1: 1.2550 (1:1 RR) – Exit 25% of position - Target 2: 1.2600 (1:2 RR) – Exit another 25%, move stop to breakeven - Target 3: 1.2650 (1:3 RR) – Exit final 25%, move stop to 1.2600 - Final 25%: Trail stop by 50 pips Price action: - Reaches 1.2550: Exit 25%, lock $1,000 profit - Reaches 1.2600: Exit another 25%, now $2,000 locked + stop at breakeven - Reaches 1.2650: Exit 25%, $3,000 locked, stop at 1.2600 on final 25% - Rallies to 1.2700, then reverses to 1.2610: Stop hit at 1.2600 - Final result: $3,000 locked profit + breakeven exit on final 25% = $3,000 total profit with ZERO risk on final quarter
FAQ
A: Not always. If your strategy has one clear TP based on structure, use that. But partial exits work well for most traders who struggle with FOMO.
A: Partial exits work psychologically. They lock profit (reducing fear) while letting winners run (capturing upside). Better than all-at-once for most traders.