The hardest part of trading is not just identifying the right trend, but knowing when to take profits. This phrase sounds simple, but very few traders can truly do it.

We’ve all heard the golden rule "The trend is your friend," but while friends are friends, not many can profit alongside it. The problem often isn’t misidentifying the trend, but wavering in execution—selling too early when you should hold, or refusing to cut losses when it’s time to exit.

I compare two mainstream trading approaches to eating fish. Trend following is like only eating the fattest part in the middle, while some want to eat from head to tail. The former requires sacrificing the ends, the latter wants to swallow it all. Neither approach is inherently better; the key is to know which part you’re eating and to use tools and methods that match that.

Strict trend followers wait for confirmation—usually four key points forming and breaking previous highs—before entering. At first glance, it might seem like chasing highs, but in reality, it’s about loyalty to the system.

But the real trick lies in the exit. When the trend line is broken the first time, reduce your position by half; if broken again, exit completely. What does this approach mean? You’ll inevitably miss the final surge, and you’ll give back some profits already gained.

It sounds like a loss, but from another perspective, that’s the beauty of trend following: using limited retracements to extend the trend. If you can’t accept these small losses, it’s hard to survive in a true trending market.

I experienced this myself during Bitcoin’s rally in 2024—selling too early, only to see it rise nearly 40% afterward. That lesson hit me hard: those who try to grab every bit of profit often end up losing the big share that rightfully belongs to them.

Swing trading is a different approach; it aims to eat everything from head to tail. This requires precise action at every high and low, but markets rarely cooperate that perfectly.