In the trading world, there’s a common debate about whether you should exit winning trades manually or allow the market to reach your pre-determined exit point, such as a take profit level. The belief that you should never exit winners manually is based on the idea that successful traders should trust their strategy and allow their profit targets to be met automatically. However, this view doesn’t account for the flexibility and adaptive approach that can sometimes be necessary in the face of changing market conditions.

Exiting winners manually is not inherently wrong, and it can sometimes be the right decision. However, it’s important to understand when it makes sense to exit a trade early and when it’s better to stick to your plan. Let’s dive into the nuances of exiting winners manually, and why it’s not always a black-and-white decision.

Why You Might Choose to Exit Winners Manually

1. Market Conditions Are Changing

• Market conditions can change rapidly. If a trade is going in your favour, but you see that market dynamics are shifting—such as a reversal pattern forming, or important news being released—it might make sense to exit the position early to lock in profits.
• Manual exits can allow you to adapt to new information and prevent profits from turning into losses. If you’re aware of changes in volatility or economic data releases, you might decide to take profits early rather than waiting for your take-profit level to be hit.

2. Risk-Reward Ratio Has Changed

• When you enter a trade, you typically set a risk-reward ratio that reflects your expectations. However, as the trade progresses, the risk-reward ratio might change. For instance, if a trade has moved significantly in your favour, the reward-to-risk ratio may no longer align with your initial plan.
• In such cases, exiting manually to lock in profits is a prudent decision, especially if the trade is no longer meeting the criteria for a favourable risk-reward ratio. Adjusting your exit strategy based on the evolving market can help you capture more profits and avoid leaving money on the table when the market begins to reverse.

3. Emotional Control

• One reason traders exit winners manually is that they are uncomfortable with the position and want to avoid the emotional rollercoaster that comes with waiting for the market to hit their exit point. If a trade is significantly profitable and you are feeling nervous about the potential for a reversal, exiting manually can help you feel more in control and reduce emotional stress.
• While emotions should not drive your trading decisions, manually exiting a trade when you feel uncertain about the market can sometimes be a way to preserve gains, especially if the market has moved rapidly in your favour and you anticipate a potential pullback.

4. A Change in Market Sentiment

• Market sentiment can shift unexpectedly, and sometimes you can sense a shift in the market before it becomes fully apparent. If the market’s overall sentiment changes (e.g., bullish to bearish), you may decide to manually exit your position in order to protect profits.
• Exiting winners manually when you sense a change in sentiment can be a smart move to avoid giving back profits during market reversals.

5. When Your Trade Hits a Key Resistance or Support Level

• Sometimes a trade might be going well, but as it approaches a key resistance or support level, you might decide to manually exit, anticipating a potential reversal. If your strategy doesn’t include a trail stop or if you’re concerned that the market might reverse at this level, exiting manually allows you to lock in profits before any potential pullback occurs.
• Many traders use technical analysis to identify major levels where the market has historically reversed or stalled. If you see your trade approaching one of these levels, exiting manually can help you capitalise on the current trend without exposing yourself to risk at critical points.

When It’s Better to Stick to Your Exit Plan

1. Having a Defined Strategy

• If your strategy includes clear exit points, like take profit levels, it’s usually best to stick to these levels. When you enter a trade, you’ve already planned for the potential risk and reward. By manually exiting the trade, you risk deviating from your strategy, which can lead to impulsive decisions and inconsistent results.
• Consistency is key in trading, and following your strategy, including the planned exit points, allows you to evaluate your performance based on a systematic approach rather than emotional reactions.

2. Letting the Trade Run Its Course

• In some cases, your initial stop-loss and take-profit levels are set in a way that reflects your strategy’s long-term goals. Exiting a winning trade prematurely can be a form of self-sabotage, especially if the market is continuing in your favour and your profit target hasn’t yet been reached.
• Letting your winning trades run can help you capitalise on larger trends. If you exit too early, you may miss out on greater profits. Many successful traders focus on letting their profits run and using strategies like trail stops to capture more gains when the market continues in their favour.

3. Reducing the Risk of Emotional Trading

• Exiting a winning trade manually can sometimes be an impulsive decision driven by fear or greed. When traders are emotionally attached to their profits, they may close positions too early to secure a win, or hold onto losses hoping the market will turn around. These emotional decisions can hurt your overall performance.
• Having a clear exit strategy and sticking to it allows you to avoid emotional trading. It ensures that you’re making decisions based on logic and strategy, rather than short-term emotional reactions.

4. Long-Term Consistency

• If you consistently exit winners manually, you might inadvertently develop a habit that affects your long-term profitability. This can lead to missed opportunities or small profits from trades that could have turned into much larger winners.
• The most successful traders focus on maintaining long-term consistency by following their strategies and trusting the process. If your strategy dictates holding onto trades until a specific exit point, sticking to this plan will lead to more reliable and sustainable returns over time.

Finding the Balance: Exiting Winners Manually vs. Following Your Strategy

Exiting winners manually isn’t inherently wrong—it’s all about balance. The best approach involves:

• Adapting to market conditions: If the market changes direction, a manual exit can sometimes be the best choice. However, this should be based on your analysis and not emotions.
• Having a solid risk management strategy: Whether you decide to exit manually or wait for your pre-set exit point, you should always have a stop-loss and risk-reward ratio in place to manage your trades effectively.
• Avoiding impulsive decisions: Emotional trading is dangerous. Use manual exits strategically when the market conditions or your analysis justify it, not because of fear or greed.
• Consistency: Sticking to your strategy will help you build a systematic approach to trading. If your plan includes manual exits, then it’s crucial to have clear criteria for when to implement this action.

Conclusion: Exiting Winners Manually—A Matter of Strategy

There is no one-size-fits-all answer to whether you should exit winners manually. It can be a smart move when the market conditions justify it, but it should not become an automatic response driven by emotions or fear of losing profits. The most successful traders adapt to the market but do so within the structure of a well-defined strategy that includes clear exit rules.

If you’re looking to improve your trading strategies, manage risk, and learn how to make more confident trading decisions, check out our Trading Courses. Our expert-led training will guide you on how to make the right decisions, whether you’re manually exiting winners or sticking to your original exit plan.