Book the Damn Profit!

Sean McLaughlin
February 23, 2023

It sounds so simple.

To win at trading means to take profits.

If there are no profits taken, there is no winning. And if there is no winning, then what am I even doing here?

Subscribers to the various options education services we provide at All Star Charts know that I’m usually very clear about where I’ll take profits in the various trades I put on. Most trades have a profit target and I set the GTC limit orders out in the market and let them get hit. I’m hands-off. Unemotional.

So it would seem that I’m pretty automatic about this practice of profit-taking in all realms of the market in which I engage.

You might be surprised that this hasn’t been true in my personal index options trading.

Not only was I not, but for some reason, I wasn’t even aware that I wasn’t.

In a blatant disregard for one of my own rules that serves me so well in other areas of my trading universe, I had blinders on. My attitude was: “just manage the risks and the profits will take care of themselves.”

And from time to time, the Market Gods would shine brightly on my position, as expected, presenting me with meaningful open profits – right there for the taking. But taking them, I did not.

Instead, greed took over – which always led me to hold out for more. “Hold your winners”, right?

Well, no.

That is good advice in certain situations with certain strategies, but not with my options strategies. I’ve (re)learned that I need to be far more aggressive in my profit-taking, while still being mindful of my exposure to risk.

I’m in the business of taking profits. So I need to get busy doing just that.

Off to close a winning trade…

Trade 'em Well,

Sean McLaughlin
Chief Options Strategist
All Star Charts, Technical Analysis Research

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