Where to Take Profit During Trades

I'm a day trader and don't want to hold onto trades for too long. Some people say if you take profit too early, you are leaving money on the table. That's true, but what if price reverses?

As the saying goes, "a bird in the hand is worth two in the bush".

Example Take Profit

My trading style is such that everything is short term. This means that my Take Profit (TP) targets are also not far. I don't like to sit through retracements if I can avoid them.

Here's an M15 chart to illustrate.

Take profit at the nearest zone

The blue line shows the nearest Support line.

I waited til price broke below the lower blue line and then retested that same line at low volume. It was a No Demand bar and it was confirmed by the next bar, which is a down-bar.

I shorted a few pips below that confirmation bar, and my Take Profit was at the nearest Support line.

Take Profit So Soon?

In the past I held onto trades hoping that prices will break out of the Support/Resistance zones for a larger win, but more often than not prices will retrace.

If you're a Swing Trader then holding onto such trades (if your analysis supports it) makes sense. For me though, I would rather close the trade first while it's in profit.

If price does break out of the Support zone, I will wait for price to retest the Support zone. If the retest is at low volume (No Demand) and confirmed by a down-bar, I can then enter another Short.

If price breaks out and keeps going, I will then wait for a pullback. If the pullback is at lower volume than the drive down, I can enter a Short when the pullback starts to resume in the direction of the trend.

Another Example

This time round, I used a H4 chart. Comments on the chart.

Take profit at edge of range

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