Importance of booking partial profits on trade
Let's say, you bought a stock and your initial risk on the trade is just 1R. So the R represent the dollar or rupee amount that you risk on each trade. After you enter the trade, if the stock moves 3R from your entry price. You should always book 70-80% profits at your target level. And let the remaining profits run with Trailing stop loss. Because you don't know when price might reverse and take back your open profits. There are many strategy used by Professional trader for trailing stop loss: MA based trailing stop loss, Previous pivot high & low, ATR Trailing Stop Loss, Percentage trailing stop loss. Never let your trading profits turn into a loss. However, strict adherence to this rule is vital for three reasons. The first reason is that it will boost your confidence and the second reason is that the account will grow consistently. And the third reason is that your remaining profits will grow bigger with Trailing stop loss. So R multiple represent the dollar o...
