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Runner

The portion of a position left open after partial profits are taken, held for a larger move with the rest already banked.

A runner is a structural answer to a psychological problem. Taking part of the position off gives the immediate reward that hyperbolic-discounting demands, while the remainder stays exposed to the outsized move that makes a trend strategy profitable.

The costs are real. Scaling out reduces average profit per trade in systems whose edge comes from full-size winners, and it adds commission and decisions. It is a trade of expectancy for consistency and for the ability to actually hold.

Define it in advance: how much comes off, at what level, where the stop on the remainder goes, and what closes it. A runner managed by feel is just a position you forgot to exit.

Related: hyperbolic-discounting, profit-giveback, take-profit, trailing-stop

See it drawn

Original diagrams for the ideas on this page. Illustrative, not real market data.

The spread of outcomes behind an expectancyA histogram of forty trades: a tall block of small losses on the left, a low spread of larger wins on the right, and a line marking the average outcome.NUMBER OF TRADES051024 LOSSES, AVG −$20016 WINS, AVG +$600EXPECTANCY +$120−$400−$200$0+$200+$400+$600+$800PROFIT OR LOSS PER TRADEexpectancy = (40% × $600) − (60% × $200) = +$120 per trade
Expectancy: the average trade. Forty trades sorted by outcome: 24 small losses and 16 larger wins. Weighting each side by how often it happens gives the average result per trade, marked here by the dashed line at +$120.

Educational only, not advice. Spotted an error? Post in Site Feedback.