Reversals just before your profit line

I was wondering how people dealt with events where your trades are just reaching your “take profit” line and all of a sudden just makes a total reversal only to rally to your stop loss.

Its apart of trading, it will happen if you allow it. You could try scaling out a portion, then place your stop at entry point, by doing this you will be in a risk free trade already in profit.

You could always apply a traling stop if you wish.

But be warned, traling stops won’t guarantee that you’ll achieve more pips. Because often, your TS might not have enough room for the trade to breathe.

If it meanders towards you TP, take it and give it the benefit of the doubt, if it’s racing let it go, but this is forex, even when it’s racing it will stop at some point, but it’s not a bad thing to go by the rule of on the whole the market will continue to do what it is doing, until it changes of course.

True, but it could also be argued that, stick to your rules, no matter what happens.

Yea I have tried using a trailing stop, and also felt the same way; it kinda reduced that space to buoy up and down and it made me feel quessy.

I like this. Thats exactly what I do atm. But because Im still very new at this, I was wondering if there was some kind of technique used besides what has already been said.

I was thinking of actually closing my trades after a given amount of time, if it hasnt reach my TP, i’ll close it at a profit, and be happy with it. Now i just gotta figure out how long i should keep my money in the market.

Good going ynoh.

I’m sure people have mastered using trailing stops, but I haven’t quite yet. It’s different for each pair.

As said before, it’s just a part of trading. Essentially, in order for this not to happen you would need to know when the market was going to go up and down (which nobody can tell you!). All you can do, is have a system that puts you on the side of probability. Whether that entails trailing stops, closing trades after a certain period/pip movement, is up to your system!

If you are that close to hitting your profit line, why would you keep your stop in negative territory?

At least move your backstop up to break even once it’s that close.

Protect capital.

As for where you place your initial TP, look into dropping your optimism a tad in order to lock in a gain.

If I think I see a possible 100 pip move, I’ll put my TP at 75.

And if it goes 150, I don’t care. It’s all about steady gains.

I often take a trade off the table if it stalls for four consecutive bars. Or for some trades, when they hit resistance near TP, take half the trade off the table and trail the Stop on the remainder to breakeven. It depends on the type of trade, which depends on the strategy used, but as Master Tang has just said, protecting capital has to come first. Ally that to a decent strategy and the money will come. I’d rather take 50 pips consistently than regularly lose 50 trying to make 100.

Its my opinion that trailing stops take you out of the trade sooner than they should, I personally never use them.

Secondly, once your trade is in profit, your Stop should be moved to BE+1 at least.

You have to figure out some kind of trade management. everyone has a different way of managing their trades.

I typically move my stop to BE +1 when the trade has gone around 20-25 pips in my favor, then I take partial profit as the trade rises.

Remember the old saying, never let a winner turn into a loser…

Cheers

And EVERY winning trade will do that won’t it? :wink:

You scream at the market until it does as you tell it to do.

No really, accept it and move on. If your system has an edge, it will become apparent after many trades; not after a single losing one.

Hahahahaha!!!

And after you lose your voice, you finally learn to listen to IT instead;)

It appears you are reacting to a couple of trades. As mentioned previously you will have losers and that will never change.

Firstly, you have to understand your trading system and why it is profitable. There are a few comments here that are true trading analogies but don’t fit every system.

My system I trade has PT 50 pips, stop 25pips. I have found in my testing if I move the stop to BE after 25 pips, it made the system less profitable. Therefore I trade my system that I will profit or lose, no breakeven. I have sat and watched my trade go with in 1 pip of TP and reverse and get stopped out. I’ve also seen quite a few go to 1 pip of the stop and reverse and hit TP. In fact my system I make 20 trades per week and all I focus on is getting 7 winners and then I profit. Don’t care which pair, what time frame.

Also , don’t focus on the individual trade because if you plan on being in forex for a long time, how many trades do you think you will make. Say 10000 trades, what does a couple of near misses equate to out of 10000 trades. Not much.

So yes whilst it is frustrating, if you understand your system & profitable edge, don’t change it, unless for improvement because of a handful of trades. Backtest or forward test the improvement on paper, you may find a BE stop or trailling stop may wreck your profitable edge.