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Is the situation described above true if ones stop is always less than ones first profit target? For example, assuming ones method allows for minimal risk on a trade ,and for sake of discussion it is a $1 stop, and the first target is always 2:1 or $2 and once that first target is hit you move your stop to break even, so even if you get stopped out on the rest of the position you make $2. Granted, if you did 100 trades with 2 units and 1/2 were full stop outs and 1/2 were only making $2 on the first target then after 100 trades you would be break even minus commissions, but not all winning trades will only be first target winners. I guess it's possible.
I think that Van Tharp is wrong or making assumptions not in the quote and/or the statement is oversimplification -
to make a point about "letting winners run" but it all dependent about distances to targets and what "letting" it run means. If a person has a 3.75pt T1 (target !) and 5.75pt T2 and a 7.75pt T3 and expected probabilities of 67%, 22% and 11% respectively - then when they are at T1 they have already "let them run".
Being too greedy and going all out for an exit can mean letting a winner turn into a loser.
So much depends upon the market, trade conditions, stop levels and many over factors.
If your position size is 9 and you sell 6 at T1 and 2 at T2 and hold the last for a trail you can be reducing your average cost and risk by scaling out while maximizing the expected profit
So I think David has a good case.
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