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?

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.

I exit the market when I need to exit the market irrespective of how much profit I have made. For instance,if I see that price has hit a weekly or monthly high and is reversing, there is no point staying in the trade because I have not made enough profit.

There was a day I closed a trade after 1:1rrcos of fear and the trade later went to do more than 1:3rr. I felt so bad and I made up my mind to always wait for my target of minimum 1:3 to be met. It has paid over time.

Unpopular opinion: I think risk to reward ratio is a scam, you hear traders say I need to set a tight stop loss so as not to risk too much, thats bs! your stop loss needs to be where your stop loss needs to be.

You talking about invalidation zone right?

yes

I understand you now.

For me this is the most difficult part of trading, deciding when to exit

You are very right. Greed is another demon every trader has to conquer. It makes traders sideline their plans and do something else.