Advanced Trading Techniques
How to Stop Cutting Your Winning Trades Short: Mastering the Mindset for Swing Trading Success
Introduction:
If you’ve been trading for a while, you’ve likely felt the frustration of closing a winning trade too soon. It’s a common issue, particularly for swing traders, where the fear of giving back profits can override the logic of holding out for larger gains. In this post, we’ll break down why traders fall into this trap and, more importantly, how to overcome it.
This article, inspired by insights from a professional trader, will guide you through practical techniques to hold your trades for their full potential. Whether you’re aiming for a 3R profit or another target, staying disciplined in the face of market fluctuations can dramatically improve your results.
The Problem: Fear of Losing Profits
At some point, every trader has set a 3R profit target, only to close the trade prematurely at 1.5R or 2R because the market seemed “tired” or uncertain. You notice a bit of stagnation or a slight pullback, and suddenly the fear of watching your gains disappear kicks in. So, you lock in the profit—only to later see the market hit your original target. Sound familiar?
This behaviour stems from the natural fear of losing profits. Emotionally, it feels safer to secure some gains rather than risk losing them altogether, even if it means missing out on bigger profits down the line.
The Solution: Tighten Your Stop-Loss
One of the most effective ways to combat the urge to close trades too early is to gradually tighten your stop-loss as the trade progresses. For example, if the price reaches 2R and you feel tempted to close, move your stop-loss to lock in some profit instead of closing the trade completely.
By doing this, you satisfy the emotional need to protect profits while still giving the trade room to hit its full target. As you become more comfortable with this strategy, you can gradually widen your stop, allowing your trades more space to run.
Go Cold Turkey: Stop Watching the Market
For traders who struggle with constant monitoring and are prone to closing trades too early, a cold turkey approach might be necessary. Once your trade is placed, stop watching the market altogether. Set alerts for when your target or stop-loss is hit, and avoid checking the chart until you receive the notification.
This method is particularly effective for traders who follow a binary system, aiming for either a 1R loss or a 3R profit. By removing the temptation to intervene, you can force yourself to stick to your original strategy.
Accept Market Behaviour: Stagnation is Normal
Markets rarely move in a straight line. If you’re aiming for extended targets like 3R or higher, it’s important to recognise that periods of stagnation or pullbacks are a natural part of price movement. Instead of panicking and closing the trade, learn to accept that this is part of the process.
Consider implementing a scaling strategy—take partial profits when the market reaches a significant level, and keep the remainder of your position for the final target. This way, you lock in some profit while still giving the trade room to reach its full potential.
Conclusion:
Cutting trades short is a challenge faced by many traders, but with the right strategies, you can overcome this habit. Whether it’s by tightening your stop-loss, stepping away from the charts, or using a scaling strategy, the key is to stay disciplined and trust your analysis.
The more you resist the urge to micromanage your trades, the more consistent your results will become
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