taking profit early feels smart until the numbers get added up
Posted: Fri Oct 30, 2026 10:31 am
Grabbing a profit the second it appears gets called discipline. Very often it's loss aversion wearing a discipline costume.
Behavioural research on loss aversion (prospect theory is the usual reference) suggests a gain on screen feels fragile, while a loss feels like something to avoid at nearly any price. In a scalp that shows up as closing at +3 pips when the plan said +6, because the open profit might vanish.
Myth: losers get held too long out of stubbornness. Reality: same wiring, opposite side. Someone who would never let a +3 turn into a -1 will happily let a -4 drift toward -7 while hoping for a bounce.
The result is a lopsided pair of averages. Small average win, bigger average loss, and a win rate that has to sit uncomfortably high just to break even once spreads come out.
Quick way to spot it: pull the last fifty trades and compare how far price ran in your favour after the exit with how far it ran against you after the exit. Nothing fancy, just two extra columns in a spreadsheet.
Does the average winner on your log come out smaller than the average loser, and did that surprise you?
Behavioural research on loss aversion (prospect theory is the usual reference) suggests a gain on screen feels fragile, while a loss feels like something to avoid at nearly any price. In a scalp that shows up as closing at +3 pips when the plan said +6, because the open profit might vanish.
Myth: losers get held too long out of stubbornness. Reality: same wiring, opposite side. Someone who would never let a +3 turn into a -1 will happily let a -4 drift toward -7 while hoping for a bounce.
The result is a lopsided pair of averages. Small average win, bigger average loss, and a win rate that has to sit uncomfortably high just to break even once spreads come out.
Quick way to spot it: pull the last fifty trades and compare how far price ran in your favour after the exit with how far it ran against you after the exit. Nothing fancy, just two extra columns in a spreadsheet.
Does the average winner on your log come out smaller than the average loser, and did that surprise you?