Psychologically you're not confident with your methodology so you get scared out of the trade. Test your strategy on sim until your confidence has build up and you make your trade and set your target with complete confidence.
this is the perennial traders dilemma that we all have to work out. New traders nearly always take profit too early based on fear of the trade reversing on them and this means they can rarely capitalise on good moves. There are various ways to deal with this and it will take hundreds or thousands of hours to work out what suits you. Before you can decide on this you need to decide on a methodology and stick with it for a while to get used to the instrument and workspace you have chosen ( in SIM)
Some deal with it by going to BE quickly to remove risk but this will result in a high % of trades stopping you out and then going on without you. Some put the stop and TP in place and just accept the result with no stop managagement intratrade. Some only move the stop after a retrace and resume that creates a new swing point. Some use a mixture of the above based on exerience and discretion. M Winfreys Jurik MA thread is a good example of the second of these.
edit: just read M Winfreys thread more closely and see that stop managment is with an ATM so my comment above is wrong. This is a 4th type of stop management - automate it. Whatever we do it needs to have a good rationale ie not be based on emotion.
Last edited by Linds; January 8th, 2011 at 01:24 AM.
Also, if you're coherent with your rules and apply them constently without changing your strategy too often, a good help is offered by backtesting and looking at the MFE (Maximum Favorable Excursion). It can help and gain confidence with pscyological factors and sharpen your runs on profit. Have a look also to MAE (Maximum Adverse Excursion) in order to sharpen your stoploss. These two factors better apply to automated strategies but they can offer a good starting point.