Book Profits Early: Yes or No?

The question I am asking you to think about today is: if it is ok to book profits before hitting the profit target. The answer to that question actually depends on each trader and thier trading plan. However for me the answer is yes, if you have a minimum of 1 to 1 risk to reward ratio. I spoke briefly about this in the article I wrote yesterday about trade size.

The bottom line is this, you must control risk. Next do not book profits early unless you get a minimum of one to one. However the key is to discipline ourselves to get a much greater win to reward ratio than one to one. If we acheive 1:2 and our profits have not hit the target than it is ok to book early. This is because you do not want to lose the gains you have already made.

As always with trading the discipline is critical. I have prepared a video about a trade I just closed and I actually did not have to book early because the price hit the target.

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