Why I stopped taking small winners
When i started trading, if I saw a $5 profit I would quickly close the trade and take it. Initially I thought I was gaming the system but I realized when i tried to enter the market again, i had to set a wider stop loss thus risking more. Sometimes placing the stop loss where it needed to be would mean I would be risking so much that I chose to place the stop loss too close to my entry and that is wheen the rain began. My stop loss was always blown again and again and I lost the little profit I thought I was securing. Sound familiar?
When i started trading, if I saw a $5 profit I would quickly close the trade and take it. Initially I thought I was gaming the system but I realized when i tried to enter the market again, i had to set a wider stop loss thus risking more. Sometimes placing the stop loss where it needed to be would mean I would be risking so much that I chose to place the stop loss too close to my entry and that is wheen the rain began. My stop loss was always blown again and again and I lost the little profit I thought I was securing. Sound familiar?
Nothing hurts more than exiting with 5 pip profit, only for the price to fall another 20 to 30 pips after you exit. That pain is worse than losing, I try to avoid it by letting my winners run till i see good evidence that the price is reversing.