Preset TP level vs "let profits run"

I'd like to know how people view the common and conflicting ideas of setting pre-defined TP levels (and SL's) vs the idea of cutting losses short and letting profits run.

Taking a profit at a set level (1, 1.5,2,3,etc) seems to be a very arbitrary way to close a trade where you have no idea where the market level is going to move (or at least seems to infer an ability to predict both a SL level that wont be hit vs a TP level that will be). Additionally, letting a trade 'run' still requires some sort of decision of where to get out of the trade, other than BE (or worse, a loss).


Do people tend to just put themselves in one camp: A) - set ranges for TP/SL and ignore the idea of letting it run, or another camp: B) let it run until a strong turn/indicator signal says close and try to let it run?

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hey nesfer..... my preference is 'b'.... usually the first opposing signal of several being used....h

Depends on how many positions one has running.

If it's 1 x micro-lot then in my view it's best to T/P at the first opposing resistance or supply level if long, or at the first opposing support or demand level if short.

Anything above 1 x micro-lot puts the trader in the position of being able to scale out/let it run. How traders do that is of course very much up to personal choice - expanding stop losses, trailing behind market structure, closing if the market looks like it's turning back etc etc.

Speaking for myself:
I found it is better to have a stop loss, and a take profit set at a fixed level.

Why use a stop loss?
1.You cannot predict the market 100%, accurately. It is just not possible, and without a stop loss the price can suddenly pump VERY HARD against you and you're done.
2.Having a stop loss limits your maximum loss for 99.9% of the trades.

Why use a take profit?
1.A take profit means if your prediction is successful then the price should hit that level anytime soon.

Many people keep adjusting their stop loss and take profit all the time, I found it is not a very good idea and now I'm using fixed "stop loss" and "take profit" levels with 1:1 ratio... It is OK you cannot have a perfect 1:1 ratio because of the spread, then you have to add some pips to cover that... Winning most trades (50% + 1), which is the minimum required to sustain a profit with a 1:1 fixed "stop loss" and "take profit" is the most likely to happen if you set a sane stop loss, and a sane time frame.

Haysee, Simond2002 - Appreciate the replies. Very interesting that with the amount of traffic on this site, this has acquired very little response. I can only imagine it is because this is very much a mental conflict with many traders, where they think/believe they 'should' LPR ("Let profits run"), but often limit a trade to TP or just take what they think is a reasonable profit (as they fear losing it in the moment).

I guess because I am in the B camp and thus have a slightly skeptical view of using arbitrary/calculated SL/TP levels, the idea of "LPR" seems to make the most sense.

I'd really like to hear from some in the A camp and try to understand if they support/believe in LPR, but also how they then mentally match what they do (locked in SL/TP) which completely goes against the idea of LPR.

Another point (which should perhaps go in its own thread) is how far do people let LPR reverse until they decide Forrest cain't run no mo'. Is it more popular to have a separate close indication, differing from an indicator that would signal going in the opposite direction? The question arises, as how do you know a trade in one direction has lost its momentum (and thus you shouldn't let it try to run further)...unless it has actually started a decent movement in the opposite direction and thus often looking like a trade you would take?

So, LPR, but close when a trade runs to a point and fade back X% of the full 'potential' profit? Close at some secondary indicator? Close at signal of potential opposite trade?