Discussing the article: "Building a Trading System (Part 5): Managing Gains Through Structured Trade Exits"
Mr. Daniel Opoku, I’ve read your new article: Building a Trading System (Part 5): Managing Gains Through Structured Trade Exits and found it to be very insightful. I appreciate the scientific approach and outlining a framework that can be approached confidently.
Your article is silent on if your method re-assigned Stop Losses to entry, say when the trade reached its first target as a reasonable risk management step or not. Does this step further improve the results you shared, or are they already ‘baked’ in?
Very inspiring article, I tried to apply your method to some of my strategies.
I found that this method is not applicable to all types of strategies even when winrate is over 50%, it depends a lot on what the edge is derived from.
What else I found that split positions and applying the method to the stoploss was much more effective for me in terms of reducing the strategy's drawdown.
Mr. Daniel Opoku, I’ve read your new article: Building a Trading System (Part 5): Managing Gains Through Structured Trade Exits and found it to be very insightful. I appreciate the scientific approach and outlining a framework that can be approached confidently.
Your article is silent on if your method re-assigned Stop Losses to entry, say when the trade reached its first target as a reasonable risk management step or not. Does this step further improve the results you shared, or are they already ‘baked’ in?
@peteboehle
I appreciate your feedback.
I did not consider breakeven scenarios after the first trade target is achieved. I looked at it in this way, anytime a profit target is achieved, the risk exposure is reduced.
We will need to backtest the strategy with breakeven scenario and compare with the strategy without breakeven before we can conclude on it.
Very inspiring article, I tried to apply your method to some of my strategies.
I found that this method is not applicable to all types of strategies even when winrate is over 50%, it depends a lot on what the edge is derived from.
What else I found that split positions and applying the method to the stoploss was much more effective for me in terms of reducing the strategy's drawdown.
@Tadeas Rusnak
Thanks for the feedback.
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Check out the new article: Building a Trading System (Part 5): Managing Gains Through Structured Trade Exits.
For many traders, it's a familiar pain point: watching a trade come within a whisker of your profit target, only to reverse and hit your stop-loss. Or worse, seeing a trailing stop close you out at breakeven before the market surges toward your original target. This article focuses on using multiple entries at different Reward-to-Risk Ratios to systematically secure gains and reduce overall risk exposure.
Over the years, traders have come up with many techniques, but most of them fall into three broad categories.
1. Trailing Stops — Letting Profits Breathe, Not Escape
A trailing stop is like a safety net that moves with your trade. As the market moves in your favor, the stop level follows — locking in profits while still allowing room for further growth.
Used well, it’s one of the simplest and most effective ways to protect gains and automate risk management. But it’s not foolproof. Set the trailing distance too tight, and you’ll get stopped out before the trade has room to develop. Make it too wide, and it loses its protective value.
Some traders refine this by using volatility-based trailing stops, like ATR multiples, to let the system adapt to changing market conditions. Still, as we saw in Part 4, this doesn’t eliminate randomness entirely — results can remain uneven.
2. Partial Lot Reductions — Taking Something Off the Table
Another popular approach is the partial closure method — a way to “have your cake and eat it too.”
Here’s how it works: a trader opens a full-sized position, and once the market moves favorably, closes part of it to secure some profits. For instance, after opening 3 lots, they might reduce exposure to 2 lots once a certain target is reached.
This early gain brings psychological relief — the sense that the trade is already a winner — while the remaining position keeps them in the game for potential further upside.
The key challenge? Discipline. Without a clear plan for when and how much to reduce, the trader risks locking in too little or too much, turning what could have been a balanced strategy into guesswork.
3. Multiple Entries with Varying Reward-to-Risk Ratios — Structuring the Chaos
The third method takes the logic of partial closures and turns it into a systematic framework. Instead of one position being scaled out, the trader opens multiple positions at once, each with:
Imagine five trades, targeting RRR values of 1.3, 1.4, 1.5, 1.6, and 1.7. As the price progresses, each target locks in profits step by step, building a layered structure of realized gains.
This technique spreads risk across outcomes, creates measurable consistency, and aligns with probability-based expectancy. It’s not without its demands — you’ll need precise position sizing and discipline in risk allocation — but when executed well, it can transform market noise into something structured, testable, and even optimizable.
Each of these methods aims at the same goal — turning potential gains into secured results — but they do it in very different ways. Whether you prefer the automation of trailing stops, the flexibility of partial closures, or the structure of multiple entries, the key lies in consistency and discipline.
Author: Daniel Opoku