Take Profit — When to Close and Walk Away

Knowing When to Close Is Half the Battle

Most trading education focuses on entries — when to buy, when to sell. But ask any experienced trader and they'll tell you: exits are where the money is made.

How many times have you seen a profitable trade turn into a loss because you didn't close it? Or closed too early, only to watch price continue 100 pips in your direction?

A solid take profit strategy removes the guesswork from your exits — and protects you from your own greed and fear.

3 Take Profit Strategies

Strategy 1: Fixed Risk-Reward Target

The simplest approach: if your stop loss is 30 pips, your take profit is 60 pips (1:2 ratio). You don't care about chart structure — you set it and walk away.

Best for: Beginners who need consistency. Start with 1:2 minimum.

Strategy 2: Structure-Based (Support/Resistance)

Place your take profit at the next significant support or resistance level. This is more intelligent because the market is likely to react at these levels.

💡 Example: You buy EUR/USD at 1.1050. The next resistance is at 1.1120 (+70 pips). Your stop loss is at 1.1025 (-25 pips). That's a 1:2.8 risk-reward ratio — excellent!

Best for: Swing traders who analyze chart structure.

Strategy 3: Scaling Out (Partial Close)

This is the professional's approach. Instead of closing 100% at one price, you split your exit:

1. Close 50% at TP1 (e.g., +30 pips) → Lock in profit
2. Move stop loss to breakeven → Zero risk on the rest
3. Close remaining 50% at TP2 (e.g., +60 pips) → Let winners run

Scaling Out — The Best of Both Worlds

Why do professionals love scaling out?

• Psychological relief — You've banked profit. Pressure drops.
• Zero risk — After moving SL to breakeven, the remaining position is "free"
• Bigger average wins — The second half can run much further
• Handles uncertainty — You don't need to predict the exact top/bottom

Common Take Profit Mistakes

• Closing too early — Fear takes over at +10 pips and you grab $1 instead of waiting for +40 pips ($4). Stick to your plan.
• No take profit at all — "I'll just hold and see what happens." What happens is the trade reverses and you lose everything.
• Moving TP further away — Greed says "just 20 more pips!" Price reverses. Don't chase.
• Always using 1:1 — You need at least 1:2 to be sustainably profitable. 1:1 requires a >50% win rate just to break even.

Quick Recap

• ✅ Always set a take profit before entering the trade
• ✅ Minimum ratio: 1:2 risk-reward
• ✅ Structure-based TP (at support/resistance) is smarter than fixed pips
• ✅ Scaling out = lock profits + let winners run
• ✅ Don't move TP further away out of greed