Profit Taking

Profit taking in the framework is an extension of thesis monitoring, not a separate prediction problem. There are three legitimate reasons to take profit. First, the thesis completes: the expansion or structure you entered for has run its observable course and is no longer present. Second, the thesis weakens: counter-direction bodies, expanding counter-movement, deeper overlap, or repeated counter-direction closes show the original conditions degrading before the wrong point is reached.

Third, price reaches a target with mechanical justification — an area such as a prior high, low, acceptance boundary, or rejection point where significant interaction is more likely. The target is not an automatic exit command. It is a reason to pay closer attention to whether the thesis remains healthy. Partial profit can be reasonable when the market is approaching such an area and the evidence has become genuinely ambiguous.

Round numbers, fixed risk-reward ratios, the feeling that price has gone far enough, and anxiety about giving back open profit are not mechanical exit reasons. The same thesis that justified the entry should also tell you when the trade is complete, weakening, or no longer worth holding.