In Part 35, we covered buying pullbacks in an uptrend. That was the entry. Today is about the exit, which is the harder half.
First, some scope. This guide covers regular coins: Bitcoin, Ethereum, Solana and other big caps. The same logic works for stocks. It applies to spot and to leverage, although on leverage you might want to derisk earlier.
Meme coins are a completely different ballgame. They get their own take profit strategy next week, in Part 37.
Below, I explain the common approaches. After that, I’ll show you the exact system I use myself.
This is Part 36 of our trading fundamentals series.
What Is a Take Profit Strategy?
A take profit strategy is a plan for where you sell and how much you sell at each level. You make that plan before you enter the trade. It turns paper gains into real money, step by step.
Most traders have an entry plan. Far fewer have an exit plan. They watch a trade go up 30%, get greedy, and ride it all the way back to zero profit. I’ve done it more times than I like to admit.
A good plan removes that decision from the heat of the moment. When price hits your level, you already know what to do.
Set Your Stop and Targets Before You Enter
This is the most important rule in this guide. Your stop loss and your take profit levels exist before you click buy.
Why? Because only then do you know what the trade costs and what it can pay. Here’s a simple example:
- Entry: $100
- Stop loss: $95
- First target: $115
You risk $5 to make $15. That’s a 3 to 1 reward-to-risk ratio. Now you can judge if the trade is worth taking.
Flip it around. If the target sits at $103, you risk $5 to make $3. That trade is a pass, no matter how good the chart looks.
The full setup process is in how to set up a trade. Your stop belongs where the idea fails, which I covered in the trade invalidation guide. Once both are set, position sizing tells you how big to go.
No Single Plan Fits Every Trade
A profit taking strategy isn’t the same for everyone. It isn’t even the same for every trade you take. Three questions decide it.
What’s your timeframe? A scalp lasts minutes or hours. A swing trade lasts days or weeks. The longer the hold, the more room your targets need.
Are you with the trend or against it? Trades with the trend deserve patience, because trends run further than anyone expects. Counter-trend trades are hit and run. Take the money fast.
Spot or leverage? Spot lets you sit through a deep pullback. Leverage doesn’t. A normal dip can wipe out a leveraged position, so bank profit sooner. The leverage trading guide shows how quickly that math turns.
Five Common Take Profit Strategies
1. One Fixed Target
You pick one price and sell everything there. It’s simple and clean. The downside is obvious: if price keeps running, you watch from the sidelines.
2. Reward-to-Risk Multiples
Your targets are multiples of your risk. If you risk 5%, you sell at 10% and 15%. Traders call these 2R and 3R. This keeps every trade mathematically consistent.
3. Scaling Out
You sell in pieces at several levels. Part of the position gets banked early, and part stays in for more. This is the base of my own approach.
4. Level-Based Targets
You sell into resistance. Old highs, round numbers and Fibonacci extensions are the usual spots. Sellers wait there, so it makes sense to sell with them. Marking those zones is covered in the support and resistance guide.
5. Trailing Stop
Instead of a fixed target, your stop follows price up. In an uptrend, you trail it under each new higher low. The market structure guide explains how to spot those lows. You never sell the top, but you catch most of a big move.
Most experienced traders combine these. So do I.
My Personal Take Profit Strategy
Here’s exactly how I handle a winning trade.
TP1: The Risk-Off Moment
Once my trade is up 10 to 15%, I take a small profit. I sell around 10% of the position.
The money itself isn’t meaningful. That’s not the point. The point is pocketing something and making the trade green.
At the same moment, I move my stop to break even. Now the trade can’t lose money anymore. My PnL is green and secured, and I can think clearly. I call this my risk-off moment.
From here, the plan depends on the type of trade.
If I’m Scalping
My second target is a full take profit. I’m in and out. A scalp isn’t meant to turn into a long-term hold. When TP2 hits, the trade is over.
If I’m Swing Trading
I take another partial at TP2. Then I set a larger target higher up for the full exit. The swing gets room to play out, but it has a clear end.
If I’m Trading With the Trend
This is where I stay patient. I take a small TP2 and a small TP3, around 15% of the position each. The rest becomes a runner.
Do the math on that. After TP3, I’ve sold 40% of my initial size. The other 60% is still open, with the stop at break even. I have plenty of room to see how high it can go.
On a $10,000 position, it looks like this:
- TP1: sell $1,000 and move the stop to break even
- TP2: sell $1,500
- TP3: sell $1,500
- Runner: $6,000 stays in the trade
Worst case, the runner closes at my entry and I keep three rounds of profit. Best case, the trend runs for weeks and the biggest part of my position rides it.
Common Profit Taking Mistakes
- Entering without an exit plan. You will make emotional decisions. Everyone does.
- Moving targets higher as price gets close. Greed talking. Your plan was right when you were calm.
- Selling everything at the first green candle. Small wins can’t cover normal losses.
- Never selling anything. Unrealized profit isn’t profit. Round trips hurt more than losses.
- Ignoring leverage. A plan built for spot gets liquidated on 10x.
The battle here is mostly mental. If greed is your weak spot, read the mental side of trading.
Keep This Content Free
Writing out my own exit plan takes time, and these guides stay free because readers use our links. Trade on OKX or Bybit through them and you back the series at no extra cost.
Final Words
A take profit strategy is a decision you make early, so you don’t have to make it under pressure. Set the stop. Set the targets. Check if the reward justifies the risk. Then let the plan do its job.
My own version is simple. Secure a small win at 10 to 15%, move the stop to break even, and let the trade type decide the rest. Copy it, adjust it, or build your own. Just have one.
Next week is Part 37: taking profit on meme coins. Different rules, different speed, different mistakes. Join the trading section and our newsletter so you don’t miss it. See you there!
FAQ
What is a take profit strategy?
It’s a plan for where you sell and how much you sell at each level. You set it before entering the trade.
When should I take profit on a trade?
At levels you defined before entry. Common choices are resistance zones, reward-to-risk multiples like 2R or 3R, or a percentage gain.
What does moving your stop to break even mean?
You raise your stop loss to your entry price. From that point, the trade can no longer lose money.
Should I sell everything at once or scale out?
Scaling out suits most trades. You bank profit early and keep exposure if price keeps running. Scalps are the exception, where a full exit makes sense.
Is a take profit strategy different on leverage?
Yes. Leveraged positions can’t survive deep pullbacks, so take profit earlier and protect the position sooner.
Does this work for meme coins?
Not really. Meme coins move faster and fall harder. Part 37 covers a separate approach for them.
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