Exiting Too Early – Why You Cut Your Winners Short
The trade is running perfectly. You're €200 in profit. Your target is €500. And then you take the €200.
Why It Happens: Prospect Theory in Real Time
In the profit zone, the brain becomes risk-averse. A sure small gain feels better than the chance of a bigger one. You systematically cut your winners short.
What It Costs: 3.4% Per Year
Terrance Odean (UC Berkeley): Traders sell winners 50% more often than losers. Exiting too early is measurably expensive.
The Solution: Exit Rules Before the Trade
Define your exit before the trade. Set a take-profit order. Remove the decision from the emotional moment.
Partial Exit as a System
50% at the first target can be systematic. What matters: it's part of your plan – not a spontaneous fear reaction.
FlowTrader AI: Measure Exit Quality
FlowTrader AI compares your average realization with your planned RRR. You can see whether you systematically exit too early.
Häufige Fragen
Not if it's part of your system. It becomes problematic when you exit spontaneously out of fear.
Compare your average realization with your planned RRR. FlowTrader AI shows this automatically.
The tendency to sell winners too early and hold losers too long. Costs traders an average of 3.4% per year.