Partial profits at multiples of the spread

[Shadow Trader]

An unusual way to set a first target is in multiples of the spread. If the spread is one pip, the first exit might be at three or four times that, so the cost of the trade is paid several times over.

The idea is that the spread represents the market's price for immediacy. A move that does not exceed it by a good margin has not given the trade enough room to be worthwhile.

This approach adapts automatically to changing conditions. When spreads widen, the target moves further away, which discourages trading in poor conditions. When spreads tighten, targets come closer.

It can also act as a filter. If the nearest realistic target is only two spreads away, the setup probably does not have enough potential.

A simple test is to look at past trades and calculate the profit as a multiple of the spread at entry. Plot the distribution and see where winners cluster.

Worth asking around: have you ever based targets on the spread, and did it change the quality of trades taken?