Level 7 · Lesson 12 of 16 · 5 min read
Scaling Out: Taking Partial Profits
Lock in some profit, let the rest run. The best of both worlds.
Researched and written by Laurent The Partial Close Strategy
One of the most practical risk management techniques: close a portion of your position at a predefined target, lock in profit, and let the remainder run with a trailing stop or higher target.
Common scaling-out approach:
Entry: 0.20 lots at 1.0800, SL at 1.0760 (40 pips risk, $80)
TP1 (50% = 0.10 lots): Close at 1.0840 (+40 pips, +$40)
Move stop to 1.0800 (breakeven) on remaining 0.10 lots
TP2 (remaining 50%): Trail stop or target 1.0900 (+100 pips, +$50 on 0.10 lots)
Best case: +$90 total (TP1 $40 + TP2 $50)
Worst case after TP1: +$40 (TP1 hit, remainder stopped at breakeven). You can't lose.
Entry: 0.20 lots at 1.0800, SL at 1.0760 (40 pips risk, $80)
TP1 (50% = 0.10 lots): Close at 1.0840 (+40 pips, +$40)
Move stop to 1.0800 (breakeven) on remaining 0.10 lots
TP2 (remaining 50%): Trail stop or target 1.0900 (+100 pips, +$50 on 0.10 lots)
Best case: +$90 total (TP1 $40 + TP2 $50)
Worst case after TP1: +$40 (TP1 hit, remainder stopped at breakeven). You can't lose.
Why This Works Psychologically
After TP1 is hit and stop is at breakeven, the trade becomes stress-free. You've already profited. The remaining position either makes more money or breaks even. This removes the anxiety that causes traders to close winning trades too early.
The Mathematical Tradeoff
Scaling out slightly reduces your average return compared to holding the full position to TP2. But it dramatically improves your realized returns because you actually follow the plan instead of panicking and closing everything at +10 pips.
The honest question: Do you frequently close winning trades too early because you're afraid of giving back profit? If yes, scaling out is specifically designed for you. The slight mathematical cost is far less than the emotional cost of repeatedly closing good trades prematurely.
Key Takeaways
- • Close 50% at 1:1 RR, move stop to breakeven, let the rest run.
- • Psychologically powerful: profit is locked, remaining trade is "free."
- • Mathematically: slightly reduces total return but significantly reduces emotional stress.
- • Ideal for traders who struggle with holding winning trades long enough.