Once you’ve won the game, there’s no reason to take unnecessary risk.
I came across this quote in Ramit Sethi’s personal finance book “I Will Teach You To Be Rich”. In the book it was referring to individuals that have achieved financial freedom, and as a result are more conservative in their investing behaviors.
For traders, this quote is a simple profit taking framework that can be added to your trading system. When you have a winning trade, there’s no reason to turn the trade into a loser by taking unnecessary risk. Hit your target, take profits, or add a stop-loss and let it ride.
As Carter Worth has said: “something elemental, so elemental as to be obvious, so obvious as to be stupid…”