Closing part of a position at targets while letting the rest run, trading expectancy for a smoother equity curve.
Selling half at +1R and moving the stop to breakeven is the most popular exit in retail trading, and its effects are widely misunderstood.
It genuinely raises win-rate and lowers variance: more trades end green, and the underwater-curve is shallower. It also usually lowers total expectancy, because trend-following returns are driven by a handful of outsized winners and scaling out caps exactly those. If your +6R trade was half-sold at +1R, it was really a +3.5R trade.
Whether that trade is worth it depends on the system and the person. Mean-reversion strategies, whose winners rarely extend, lose little by scaling out. Breakout and trend systems lose a lot. Test it: run the r-distribution both ways on the same trades and compare expectancy against max-drawdown rather than assuming smoother is better.
Original diagrams for the ideas on this page. Illustrative, not real market data.
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.