Tag Archive for: Pullback

Why you can’t hold your position to the final TP

You placed your final take profit at a level that made sense. A structural high, a measured target, a clean R-multiple. You had a reason for it.

Then the trade went your way. It moved, it built, it looked exactly like it was supposed to. And you closed the whole position. Not a partial — everything. You told yourself it was the right call, that locking in the gain was disciplined, that you were protecting the account.

Then you watched the trade carry on and hit your original target anyway.

This is not a discipline problem. It is not even really a psychology problem. It is a sizing problem, working in reverse.

The same issue as position sizing, wearing a different mask

Last week’s post was about what happens when your position is too large going into a trade. The nerves. The inability to hold a stop calmly. The way a losing trade feels catastrophic when the size is wrong.

The same mechanic applies on the way up.

When your position is oversized, you do not just feel the losses more intensely. You feel the gains more intensely too. A trade that is running in your favour starts to show you a number in green that feels real and meaningful and, critically, fragile. The thought arrives quietly: what if it turns? What if I give all of this back?

So you close it all. You take the full profit early. And you call it sensible.

The trade did not fail. The size made it impossible to sit in.

When your position is oversized, you do not just feel the losses more intensely. You feel the gains more intensely too.

You do not fully trust where your TP is or why

The second reason traders close too early is that they placed a target at a level they do not really believe in.

If you understand market structure, your final TP is at a structural level for a reason. It is where the previous high sits, where liquidity will be drawn, where the market is likely to reach before it decides what to do next. You placed it there because the chart told you to.

But if you placed it there because it looked like a round number, or because someone else suggested it, or because it was “about right,” you will not trust it when the trade is mid-run. The doubt arrives the moment the price pauses or consolidates, and the easiest way to resolve doubt is to exit.

Understanding why your target is where it is makes it much easier to stay in the trade long enough to hit it. The structure holds the stop in place. It holds the target in place too.

Markets move in waves. Pullbacks are not reversals.

Price does not go from your entry to your final TP in a straight line. It pushes, pulls back, consolidates, and then continues. This is normal. It is how markets move.

But when you are watching a trade tick by tick, a pullback mid-run feels like the trade is breaking. You were up a meaningful amount. Now that number is smaller. The instinct is to protect what is left before it disappears entirely.

Most of the time, what you are watching is just the trade breathing. The structure is still intact. The original reason for the trade is still valid. The pullback is not an exit signal. It is the market doing what it always does before continuing.

Stepping away from the screen during a live trade is one of the most underrated skills in trading. The trader who is not watching every tick is usually the one who is still in the trade when the final TP hits.

The part that actually helps: partials and break even

Taking some profit off the table is not the same as closing the whole trade early.

If you have sized correctly and the trade is moving your way, taking a partial at an intermediate level changes the emotional equation. You have locked in something real. The remaining position is now smaller. And if you move your stop to break even at the same time, what is left cannot lose.

That combination – a partial taken at a reasonable point and a stop moved to entry – gives you a guaranteed outcome on the trade. You have already won something. What is left can run to the final TP without the same weight of anxiety sitting on it.

This is not the same as closing everything early. It is managing the trade in a way that lets you hold the rest of it calmly.

The pullback is not an exit signal. It is the market doing what it always does before continuing.

The calculation came before the emotions

Your final take profit was set before the trade opened. You looked at the chart with no position on, no money at risk, no emotional stake in the outcome. You found the level that made sense.

Then the trade opened, money went on the line, and the feelings arrived. The number in green started talking.

The decision to close everything early is made by someone who is inside the trade, watching every tick, feeling the weight of potential loss on a gain that has not yet been secured. The original TP was set by someone who was none of those things.

When those two decisions conflict, trust the one that was made from the outside.

What an A+ Setup Looks Like on the Indicator

Silver futures, just after 10am London time. The 1-minute chart had been grinding lower into the session. Bearish bias was there on the higher timeframes, and the indicator was painting a five-point sequence I’ve now seen play out enough times to know what to look for.

The trade ran 1.58R with effectively zero drawdown.

But the result isn’t the point. The setup is. Most sequences that print on the indicator are fine. They work often enough. The A+ ones look different, and once you’ve watched a few play out, you stop being willing to risk real money on the average ones.

Here’s what made this one A+, walking through it in roughly the order it printed.

The geometry has to make sense first

Before anything else, I’m looking at the distance between Step 3 and Step 5.

Step 3 is the swing low we want to see break out of the zone. Step 5 is the deeper swing low that completes the bearish structure, the furthest point from the zone before price heads back toward our liquidity at Step 4. A short distance between (3) and (5) means the pullback is shallow and the R:R gets compressed before you’ve even started.

This trade had room. Step 5 sat a meaningful distance below Step 3, which meant any pullback back up into Step 4 had to be substantial. A substantial pullback means a deeper entry, a tighter stop relative to the target, and a setup that’s worth taking risk on. If the geometry’s wrong, nothing else on the chart matters.

The depth of the Step 4 tap

The second filter is how price interacts with the Step 4 zone.

What I want to see is a clean sweep of (4) and an immediate rejection, not a deep mitigation well beyond (4). On this trade, price came back into the zone, wicked (4), and turned. That’s the indicator’s job, to observe, track and display these sequences as they play out, and it did it.

What made it A+ rather than just acceptable was what other confluences we could observe around that tap. The rejection came off a bearish fair value gap (FVG), an unfilled imbalance left by an earlier full-bodied bearish candle. So it wasn’t just price sweeping the liquidity at (4) and turning. It was price sweeping liquidity, hitting fresh bearish imbalance from a candle that had real intent behind it, and refusing to push through.

That’s not a coincidence. That’s sellers showing up exactly where you’d expect them to.

The Flip and what sits around it

The Flip is my entry trigger, the moment the indicator confirms a structural break in the direction of the original bias. On its own, it’s a signal. With the right context around it, it’s a different category of signal.

What I want to see around The Flip

Two things gave this one extra weight.

First, fresh bearish FVGs started forming right after The Flip. Multiple of them. That tells me the move down isn’t a one-candle reaction, it’s a sequence with momentum behind it. Each new FVG is an unfilled gap, and unfilled gaps are evidence that price is moving with intent rather than chopping.

Second, The Flip printed below both the 50 and 100 EMA. This one’s a hard filter for me in bearish setups, and I’ve built it directly into the indicator. If The Flip is above the 50 EMA, I’m probably looking at a counter-trend reversal, and counter-trend trades are a different beast. Below the 50 EMA, in an already bearish higher-timeframe context, means I’m taking continuation in the direction of the trend. The old adage holds up here, the trend is your friend, and on this setup everything was pointing the same way.

Execution becomes easy when the setup is right

Here’s the part I want to be honest about. When the setup is genuinely A+, execution stops being the hard part.

On this trade, I set my entry exactly on the flip line. There was zero drawdown. Not “almost zero,” literally none, because price had already committed to the move before The Flip printed, and the entry sat at the boundary of that commitment.

When price pushed close to 1R, I moved my stop to break even. That’s the rule, and it didn’t require any negotiation with myself. Target was Step 5, same as always.

After a minor pullback (the kind that always shows up and always feels worse than it is), price continued down. Two more fresh bearish FVGs formed on the way. TP hit cleanly.

The trade took care of itself, because everything that needed to be true at entry was already true.

A+ setups are filters, not formulas

The reason I keep using the phrase A+ instead of just “valid” is that the indicator will give you valid signals all day long. A large percentage of them will work. The job isn’t to take all of them.

The job is to wait for the ones where the geometry, the conditions of the sweep, the quality of the rejection, the freshness of the imbalance, and the EMA position all line up the same way.

You won’t get many of these every session, sometimes only 1 or 2 a week.

That’s fine. The discipline is in the waiting, not the trading.