If we take 'taking a gain is always the right thing to do' to full extent, it guarantees failure - it means as soon as we have the smallest of profits we should sell, meaning we can never make anything more than a negligible amount of money... but we can still have up to 100% losses.
Of course, the goal is to optimise our total net profits, not just increase the percentage of our trades which result in profit.
Not that I'd advocate for it but always selling as soon as you're on a loss would be a better strategy as it would ensure you never lose more than a trivial amount.
Each to their own and there is no limit on the number of different strategies which can work for different people, but letting your winners run and cutting your losses off generally tends to be a good strategy. People too often miss out because they either take profit too early an miss most of the rally, or they avoid buying in because the rally has already started and they always see a price higher than they could have bought for yesterday. Personally I don't aim for the top or bottom, I aim to wait for the start of momentum and ride it until the momentum stops, preferring to miss each end of the rally in order to have a better chance of riding rallies. Having said that, if a pullback is sufficiently likely to be sufficiently large, I will sell out and get back in. If we had consecutive green candles this week and closed the gap at 9.3c on Thursday for example, I'd take profit and buy back either when the pullback showed signs of ending, or when it continued running and I realised no pullback was coming (and yes, I'd pay a higher price and miss a few pips)... but I doubt we'll see 9.3c this week.
Incidentally, this is a good example of my strategy - I didn't try to pick the bottom on QPM, I bought in when the party had already started and 5.7c resistance was broken. Sure, I could have bought in lower, but there was the risk of resistance not being broken and having my money tied up for months or potentially years. I'd rather catch half the momentum in a fraction of the time with a greater chance of success, and it also gives me the opportunity to catch more than 100% of the total rally if there is sufficient fluctuation cycling over time. Not to denigrate those who play the long game - that's a perfectly valid strategy too, it just has different strengths and weaknesses, and that makes it more suitable to some people than what I do, both in terms of the amount of time and effort put in, and most critically, the type of work/analysis required. Long term value investing is generally less risky and less psychologically intense, though I puzzle over people who use that strategy yet post on Hot Copper routinely and get upset about swing and day traders! Haha!
But everyone tends to be in a good mood during beautiful rallies.
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