The PERFECT Trade Exit with THIS Indicator!

Took profits far too early. Sound familiar? You exited your trade way too soon, even though it kept running much further. You only saw that afterwards. But the reality is this: if you have predefined profit targets via a limit order, do you stick to 'em or do you move 'em? And now the question goes one step further: how does it work with the mathematics? How often were your profit targets cleverly defined and it was smart to get out? And how often might you have earned more with a trailing stop loss? Are these mathematical probabilities that you use for yourself, or are they just stories where you think it might be that way? And that's exactly what I'm getting to the bottom of today, because I just had a trade, and this trade, yes, it was executed, it was also good in terms of the risk-reward ratio, but in the end, I could have earned much more. And am I annoyed now? Ah, that's alright, because that's exactly how I can make money sustainably. By using smart predefined levels. Stay tuned because this is really exciting for you, because I've put people like Patrick Nill, Fabio Valentini, or even Christoph Radicker, Andrea Cimatan, all big names in trading, on this track to success. And if you want to get there too, it makes sense to listen more closely today. I'm looking forward to explaining it all to you in depth.

Yeah, I really want to show you today that it's important to take profits and that it makes little sense to get annoyed if a market then continues to run extremely far. Because yes, sometimes that happens, and I know it only too well, thinking afterwards, "Oh my God, why didn't you just let it run?" But we have a strategy, and a strategy has key figures. Let's say the average move of the DAX future, for example, after the market opening is initially 180 points based on the ATR. And then yesterday we had a move that was 700 points. Yeah, that's extreme, but I had a long trade, the direction was right, everything was spot on. Nonetheless, the market continued to run massively after that, and I want to show you what really matters and what the essence is to simply make money sustainably in trading. Let's start with the trade idea. What was my idea? My idea was simply: we had an absolutely fantastic overnight session here, and then the market provided me with a really significant upward impulse, and this impulse then continued to climb steadily higher with a very nice P profile. A nice strategy from my PPD logic. In addition, we had the following picture, and that's just very, very important to look at as well. We are down here at the absolute low on Monday, the market opening, and right here was the final closing price from this past Friday. That means first I had to evaluate whether this gap that's present is a gap that's likely to be closed or if there's a fundamental news story behind it that really leads to the whole thing being extremely weak now. I decided for meself, nah, the probability that it will initially go in that direction is definitely high. Often on Mondays we have extremes in one direction or the other, and that prompted me to look for a long trade first. So let's go back. I then got the long trade, namely after the market made a pullback here and gave me a buy signal here. What's it about now? In the end, it's quite simply about the fact that I have a risk here and that I have a real opportunity. Anyone who frequently trades such trend-following strategies for themselves will eventually have key figures. Average risk-reward ratio. And my average risk-reward ratio when I trade in the direction of the trend and also have a wonderful pullback on a balancer where I can assume there's still room to the upside. That's the next point that's important. How do I define my profit target? I'll get to that in a moment. Is exactly an average risk-reward ratio of a good 2, 2.5 as a rule. So as you can clearly see here on the chart, yes, we had our specific risk points established here, and we also had a predefined profit target set over a distance that produced a solid risk-reward ratio of almost 3, or actually it was exactly 3. Yes, as we can see. So, and what's the next thing that's then decisive for me? That was about 80 points that I'd planned. The next decisive thing is, do I see the thing through? The reason for this is that quite a lot of people often tend to go and find themselves facing the common issue that they'll implement their trade in terms of the original idea, but they simply won't allow it to run its full course. That's me stop loss. And you can already see there, if you don't let your winners run mathematically, you'll never be able to make money sustainably with it. Check out my previous videos where I explained risk management in detail. So, all well and good. And what's the decisive thing now? The decisive thing is that you take your profit up here if you've predefined a profit target here. And I add that. And that's exactly what I'm on about today. My profit target was from Friday. There was a small buy-in tail here. Here was the value. That was me profit target where I could plan for the market to run to first. As you can see, that is perfectly consistent with this particular price bracket. But now something quite interesting has occurred. The market then continued to climb further upwards in this area. And like crazy too. And now I can be annoyed as anything. Or I can say, mathematically, and this is what's so incredibly important to me, these are my key figures that I have. So looking back at it now, why exactly was it that I didn't let my trade run there? Well, very simple answer. If you're active as a trader and use such a strategy for yourself and you have your key figures, then use them. Many people just don't do that. Let's take a look at what else happened after that. In the end, we eventually exited in this specific price range right here, but the market just kept running much further than we expected. Yes, in that case, by trailing the stop loss, you'd certainly have had good opportunities to get a much larger profit. Many say, yes, why didn't Tom do that? I can tell ya, because I simply know from my mathematics, this plannable distance has often resulted in the following for me: I go in here, I let the trade run, it arrives here, and often makes a quick reversal. Why does it make a quick reversal? Because I'd predefined levels accordingly that are smart. This level, this price range, was clever to start with because we had a gap completely outside of the previous day. That means the trend is looking aggressively short. I'd assumed that we'd run towards the gap, but there was something in the way. So I'll go ahead and define the whole thing for myself accordingly, and then I don't have to get all annoyed about it. But of course, I can go ahead now and, for example, look for new trades as a next step. Because trades are obviously the best when you get in and the market runs 500 points in your favor. But how often does it actually do that? Aren't you messing up your key figures here? The ones I just explained to you? Because if you don't get out here, then the market does this, just as I've just shown. You might move your stop up to this price range here. And the market makes a quick reversal, and all of a sudden your risk-reward ratio is only at 1. And that is the truth. And that's why you need to know what my win rate is, what my risk-reward is for a strategy. And now, of course, you can track how often it happens to me if I don't take my profit, my profit taking, immediately. That the market continues to run, because if that's the case, then you've simply chosen a strategy that just isn't good. You haven't predefined any clever profit-taking levels for yourself. Let's go back to yesterday and take a look at the whole thing. This is already very, very exciting. Look here. As I mentioned earlier, this specific level is exactly where I decided to take my profits during the morning session. Now let us take a much closer look at how significant this current price point actually is when you compare it to the price action we have seen over all of the previous days. As I said, after hours, this is a typical day, for example. It has an expansion of 320 to 960, which is quite large. And now let's look here, 675 to 960. That means that with the start of this week, we've already in effect almost created the expansion of a normal trend day. That's also important for me to then say I'd rather take profits there. And when a market really surges ahead like it did yesterday, it successfully established 1, 2, 3, 4 single print areas, which signifies significant and absolute market imbalances. And these 4 single print areas naturally created a substantial and powerful price movement in the 24-hour profile as well as the weekly profile. And if you just take a moment to compare how the past few weeks have been looking also with the trend profiles, and now you look at this day, you can see it's really quite exceptionally extreme. And when I see something like that, I I just know here we're moving into the cash timeframe. The probability that it will repair this single print area first is relatively high, and so I might well get the idea now and first see if I can find a short trade against this trend. But again, only do that if you have a cleverly predefined level and not just anywhere. Because if you do it just anywhere, you're gonna get clobbered. And for me, the most essential thing is: you have a strategy with corresponding key figures and mustn't get annoyed if the market moves through such a price range far beyond your take profit. Because if you track that over 100 trades, and in 100 trades you have your profit taking, Perhaps 60 times, right? Spot on or relatively close to it. And in the other 40 times, it continued to run gigantically 20 times, and 20 times it made a balance, so a sideways phase. But the other 60 times, it showed a strong reaction. You'll see, mathematically, you'd have made much more money if you'd taken your profits. And that's day trading, the constant execution of strategies. I hope that was cool for you. I hope it showed you that it's really important to take your profits, and you enjoy this practical example of how important it is to take your profits, and that you don't have to get incredibly annoyed when things turn out differently. Enjoy the video!