How to Protect Profits Without Cutting Winners Short

The run, with the stop drawn in

Here is a real run on daily candles — one candle is one day — gold from the 28 August 2025 close of 3416.46, with a trailing stop 100 dollars under the price drawn as the gold steps. It closed the trade on 9 October at 3959.19, 542.73 above where it began. The run went on without it to a top of 4381.38 on 20 October, eleven days later. The stop kept 542.73 of a run that reached 964.92. The subject of this paper is that gap: a stop that follows protects a profit, and the width it follows at decides how much of the run it keeps and how much it leaves, and no width keeps all of it.

Pruning a tree

Picture a tree being pruned. The dead wood, the branch that has already died back, is cut; the growing tip is left alone, however tempting the shears, because it is where the next season's height comes from. Protecting a profit is that pruning. A stop that follows the price up is the shears, and the distance it follows at is the width of the cut: too close and it takes the growing tip with the dead wood, too far and the dead wood is left to rot. The tree does not say in advance which branch is which. The gardener sets the width and accepts what it takes.

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