How Traders Lose Money Waiting for Extra Ticks

FinanceThe FATAL MISTAKE That Costs Traders THOUSANDS🚨

TL;DR

Traders frequently lose thousands by refusing to take profits near their target, holding for just a few more ticks and watching positions reverse against them.

Key Takeaways

1Waiting for just 5 ticks of additional profit can result in losing 95 points when the trade reverses, creating a 95-to-5 negative risk-reward ratio.
2Taking an extra $50 loss by closing early is preferable to holding on hoping for minimal gains that often turn into major losses.
3Traders mistakenly believe they have risk-free trades when they're actually risking unrealized profits—the gains they haven't locked in yet.
4The psychological trap of greed over small additional points costs traders thousands by turning winning trades into losing ones.

Notable Quotes

“I'd rather just close it and give up the 50 bucks”
— Trader

“You are risking unrealized profits. That's what you have to really determine.”
— Trader

“You're giving up 95 points for five”
— Trader

Chapters

1. The Five-Tick Mistake

Traders commonly hold positions just five ticks below their profit target, hoping for extra gains but facing the risk of complete reversal—giving up 95 points to chase 5.

2. Risk-Reward Reality

Closing a trade near target for $50 loss is mathematically superior to holding for minimal gains that frequently reverse into major losses due to poor risk-reward ratios.

3. Unrealized Profits Are Real Risk

Traders fail to recognize that unrealized profits are already at risk; holding for a few extra ticks means risking those gains for minimal additional return.

Glossary

Ticks: The smallest price movement increment in a futures or trading contract; traders waiting for a few more ticks are hoping for minimal additional profit.
Risk-Reward Ratio: The relationship between potential profit and potential loss on a trade; a ratio of 95 points lost to 5 points gained is heavily negative.
Unrealized Profits: Gains on an open position that have not been locked in by closing the trade; these profits can disappear if the position reverses.

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