Mark Douglas is misquoted, IMO. He advocated doing that exercise as a technique for removing emotion out of trading. I am not sure though that the technique is likely to yield long term benefit, because now you introduce multiple probabilities into your trading profitability. P1 = stop out at entry. P2 = stop out after 1st profit take. P3 = stopout after 2nd profit take, etc. That is a lot of probabilities to work out to assess if your trading system is profitable or not. Way too complex for me. I take profit when we are overbought, and I am willing to let go of the last bit of the rally - so be it, I am not in it to catch 100% of the move - but then a trailing stoploss will never catch 100% anyways. What I should say though - is that I have a money management system that I call a running trade. Once I have a trade that is outperforming, (like APN), I move the proceeds into a separate 'virtual' trading account, and I allow for re-entries. if I enter on a running trade, then it doesn't count towards my 6% of capital rule.