Where to Take Profit

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

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.

GBPUSD M!5

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.

Buy Snap: -1.88 
uso 
I USO 
I USO 
luso Ico 
Spread: 2 
Unenplo•yrnent 
'CPI m,'m 
'core CPI m,'m 
Sell S'.yap. 
• -1.83 
Gap 
CAD 
AUD 
NZD 
Thu 
Thu 
Thu 
Fri 
3.6 
2.7 
2.6 
1.6 
121:3e 
121:3e 
121:3e 
121:3e 
: 17 : 
Trade entered. 
Took profit. 
Take profit at edge of range even if 
you think price will break out of range. 
If price really breaks out of range after 
you take profit, re-enter when price 
retraces at low volume. 
0.0 
Spread: 2 
0.72510 
0.72155 
0.71975 
0.71795 
0.71620 
0.71440 
0.71260 
0.71085 
0.70M 
0.70010 
Claims 
Oct 2020 
19 Oct 00:00 
20 octos:oo 21 Oct 
23 Oct 26 Oct OS:OO 27 Oct 
29 Oct 00:00 
30 Oct os:m 
2 Nov 
4 Nov S as:zo 
E Nov 
10 Nov 
Nov
AUDUSD H4

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