Do you often find yourself wondering whether to let profits run, even at the risk of hitting your stop-loss, or to close the position when your target is reached?
When you trade with a target in mind, itâs typically because you enjoy the action (or you want to make quick money). This approach requires much more attention to the market compared to letting a position run and not constantly monitoring it.
Both systems can be completely valid. Their effectiveness, of course, depends firstly on the trader's skill and secondly on their trading style, which should align with their personality.
Not all traders are suited for, or willing to meet, the demands of intraday trading, and not everyone has the patience to leave a position open for an extended period.
The first option (trading with a target) is more suited to traders who want to be in the market all the time, who enjoy the action, need adrenaline, and find satisfaction only in quick entries and exits.
The second option (enter, set a stop, and forget) suits more patient traders who prefer more freedom and donât want to constantly monitor the market's fluctuations.
For the first type of trader, the ideal trade looks like this: open the trade (often with high leverage), take a quick profit, close the position, and shut down the computer once the daily goal is achieved.
Pros: If they trade with significant leverage and have a proven track record, they could make their monthly earnings in just a few hours or even less.
Cons: Overtrading. If they experience just a few losing trades, it may be nearly impossible to achieve the dayâs profit target. If the daily goal is to earn 5% of total capital, just 3 or 4 losing trades could make it very difficult to recover.
Some traders using this strategy close their platforms for the day once they hit a negative daily target. However, the losses still accumulate (as no one wins every day or always ends up with a positive balance). Ultimately, the difference between good and bad trades will determine the final balance of the day.
These traders log off because they understand that itâs just not their day, and it's better to step back and leave it for the next session.
Therefore, the intraday trader who works with daily targets to achieve consistency must operate with the precision of a surgeon.
For the second type of trader, the strategy is similar, but they are willing to wait longer for the ideal opportunity, showing no fatigue in the waiting process. They are less likely to overtrade and have a "sniper" mentality.
Prosï»ż: By letting profits run without focusing on a daily target, they can potentially achieve much larger gains simply by holding the position over time, and with less effort.
Cons: Often, by waiting for profits to grow, the price may reverse, hitting the stop-loss. If they are not mentally strong enough, they might not withstand this type of trading for long.
 What type of trader are you?