An Observation on Exits

I remember reading a very interesting bit in Dr. Van Tharp's book. It was in the How to Take Profits chapter, under a section called What to avoid. It starts like this:

"There is one kind of exit that is designed to get rid of losses, but it totally goes against the golden rule of trading of cut your losses short and let your profit run."

And this is what he meant when I have two take profit levels. If you look into my stats box as of today, you would see the following: -

Total profits = $862.50
TP 1 = $212.50
Which means TP2 = $650.00

Now.. the profit ratio of TP2 is way better than TP1. In fact, it is better by slightly more than 3 times. So, why would I still exit at a TP1 level? Why would I insist on doing something that is adversed to maximizing my profits? Why would I take a hit at full impact, but when I take my best profits, I take it with just half of my initial position?

The book says it's all down to wanting to be right, it's about staying in control. When I have taken profit at TP1, I've sometimes said: "A bird in the hand is worth two in the bush."

I think that reflects my psychological need to be right, to be safe.

So, I'm gonna skip taking profit at the first level, and I'm gonna aim higher for the larger moves!

Also, if you haven't yet tried a card game idea that I've taken from Dr. Van Tharp's book, please check it out here.