Taking profits and knowing where to do it is as important as applying a stop loss in a safe area. We suffer with the emotions of taking profits but partial profits and trailing stops can be the key to maximising our trades.
My Rule: Take Something at the First Barrier
From experience, I always like to take partial profits at the first point of resistance (or support if I’m short). What does that mean?
Basically, the first place price has struggled before. That could be:
A previous swing high or low
A zone of consolidation
A sharp reaction area (wick rejections, big volume spots, etc.)
These areas attract attention. They're magnets for profit-taking and can often be the start of retracement.
Stay in the Trade With a Smarter Stop
After that, I trail my stop using the ATR (Average True Range).
Why?
Because volatility matters. Using a 1x ATR stop below/above structure helps account for market noise without choking the trade too tight.
If the market wants to trend try to let it.
If it pulls back and stops me, no stress, I've already locked in partials.
The Win-Win Exit Strategy
If the trade keeps running: I’m in it for the ride
If it pulls back: I took profit early and exited smart
If it fakes out completely: I’m out with a smaller hit
Don’t get me wrong, you will come out with a lot of small winners, but when the one goes, it can go 2-3 times further than your risk.