Let Your Profits Run

Stop Cutting your Winners too Early with these 3 Methods

Just like our environment teaches us not to take a loss, it also tells us that “a bird in the hand is worth two in the bush”.

But in trading, we need to change the narrative.

This article is for those of you who:

• Exit a trade at break-even due to fear of loss, only to watch price going in your direction.

• Exit a trade before your take profit gets hit, afraid you’ll miss the profits if the market reverses, only to watch the trade hit your target.

• Exit a trade at a small loss well before the stop loss is reached, only to watch the trade become a winner.

There are multiple causes for traders to cut winners short. It may be due to your strategy, mindset, personal limiting beliefs, recency bias (give more importance to recent events and lose the notion of the bigger picture), or some combination of those.

This has been a struggle in my own trading and after analyzing things, I realized that my particular cause has to do with my background:

If I told my goals to someone, the people around me would cut the feeling real quick by saying things like “You have to content yourself with what you have”, “Money doesn’t make you happy, it’s an illusion”, “The bigger they are the harder they fall”.

Even tho these weren’t the beliefs I wanted for myself, I spent so much time with them that they made me believe I didn’t deserve more than a certain patamar in life. I just saw a certain level of success as out of my reach.

These kinds of beliefs got ingrained in my brain and transposed into my trading life.

If I wanted to fix the urge of snatching profits too early, the answer was in replacing limiting beliefs.

It’s been a challenging ride and although I can’t say I’ve irradicated completely this mistake, I’ve reduced its negative effects by far by incorporating some methods.

Let’s dive into each one of these 3 methods that’ll help you let your profits run: