I have observed most of the times after booking my profits ( rule= > risk:reward 1:2 ) price keep on rising …rising and making new highs …and I am feeling bad as for booking early.
So I am in a dilemma…
Do I need to control myself and instruct my psychology to follow rules and ignore further price surges ?
Or
I really need to work upon to improve my strategy to stay in the move ?
presently I am booking on (2 x risk ).
Need help at this part.
Please share experience.
have you ever lost money booking profit?
Why not experiment with taking profit from half the position, moving your stop to break-even & letting the other half run until you get an exit signal. Or implement a trailing stop that locks in some profit.
It all depends on how often you leave pips on the table & how many. It’s trial & error in tweaking your strategy in order to optimise it.
you can never measure it, you just cant tell. what if your long gbp/usd then someone at citibank buys 500 million dollars. The position will go against you. Just be happy with what you can get. This is all part of the psychology of trading.
You need exit rules to your system mate. Like closing 1/2 at some point and closing the other when you see a reversal signal.
I have this note in the top left hand corner of my screen. All my notes with regards to strategies have one theme. “Nobody, Ever Went Broke Closing Their Trade in Profit.” Remember, think long term, one trade, one session doesn’t matter in the long term. If you keep practing, and trading your aim gets better and better, and as you gain the experience you’ll find in most cases, you’ll be making more pips. Protect the bankroll at all costs. It will come be patient
Gp
Lots of good advise here from babypips members
I agree with [B]baz [/B]and [B]perryfx[/B]
Try to devide your position.
I do the following:
Usually I devide to 3 parts:
Find the style that suits you best.
And don’t forget - the first goal of any trader is to “stay above new-zero”. Everything else is - experiments and optimization.
Good Luck
Nice problem to have
@ godzilla - Plus 1 to every suggestions here.
Exiting early is OK, so as long as you feel comfortable that you made the right choice. Especially when you end up on the profit side after you finished with your trade. There is always going to be “What if”, do not worry about that.
For example, last night I have an open trade on my Demo Account, that I also copied over to my live account. I have set the SL at 100 pips, and TP at 200 pips on the demo, and SL at 100 pips, and TP @ 40. This morning I noticed that my live account hits my TP, but my demo was still profiting. I also thought about “What if” I set my TP at 200 pips, wouldn’t that be nice. But then I feels comfortable that I did set my TP at 40 pips vs. being greedy and set my TP at 200 pips.
From my experiences from my past trades, I would said that you did the right thing. Thumb Ups
I like what you said, really drove it home “Protect the bank roll at all costs.” It is easy to focus on profits, but you know you have turned the corner when your thoughts now begin with how can I protect my initial investment.
When I read this I wonder if you have a real target on the chart. Are you using anykind of tool to target where the Big Boys are trying to take the currency…how about fibs on your chart to see where the bounce points are…are you using any kind of elliot wave analysis to try and determine what wave you are in…there are so many different tools you can use to help you determine where you are trying to get to with price action. Also are you looking at the ATR for the day to see how far the currency might go in the session you are trading. I have been taught not to ever limit out…move your stops to protect profit but let it run if thats what it wants to do…so at certain levels pull your stop close to protect profit or limit part of position out and let the rest run…also using a break-even methodology would allow you to have no risk on a trade except your profit and would protect your nest egg but would allow you to capture a long running move with no risk. Think its all about putting all the piece together and using consistent rules for yourself to maximize your winners. In Forex its important to capitilize on the winners as much as possible because there are going to be many situations that just do not go as planned.
With all that said…book the profits and deal with the psycholgical issues of missing out. But use those issues that are building inside yourself to go learn how to manage your trades and trust your lines on the charts so you know where to exit and where to push it.
Always put something in the bank and always protect what you got…but you got to learn to let the winners run and cut the losers fast and that is a very long and hard thing to learn even when it sounds so damn simple.
Hope this helps.
Trust me, if you follow this, you will end up negative balance.
Let me give you example: you buy 10 lot EU and your R/R is $10:$20. After that, price reach your TP and you closed half your position. Now you booked $10, move your SL to breakeven and you still buy 5 lot EU. OK you will have free run for profit. Are you sure your long will hit the next TP?
But your problem is, if price drop to your SL, you spend $10 to profit $10 (of course you will lose nothing). Remember, your plan is risk $10 to take $20 reward.
Next, we will calculate your system.
First trade : profit +$10
Second trade : Profit -$10
Third trade : profit +$10
After three trades, your profit $10. But if you close all your position, you will end up profit $30. Sure you will have some good trade with free run, but at that time you only have half your position and your profit is not too much.
You can try and see the real result. I tried and end up negative balance.
Is it just me, did I miss something in the last post? Made no sense.
Me too… To me profits is profits. *** Confused ***
In all fairness to Kotlt, despite his post being a difficult read, it does makes sense. Conveying these sort of things can be difficult. Read it a few times, see if it helps.
My initial post was only a general suggestion, not a full blown solution. Leaving half of the position open leaves potential to benefit from further movement in the correct direction but it also helps them monitor how price moved because they’ll pay more attention to an open trade than one that has already closed.
There’s numerous things that can be tried (eg. a tight trailing stop), however, I personally think that the key issue that needs addressed is that the OP needs to work on predicting their take profit level if price is regularly overshooting there expectations. As they say, which is always easier said than done, “Let your winners run”.
How is the TP level chosen? How is price reacting as it’s approaching that level ie. is it big strong candles or small indecisive one. There’s plenty of questions & plenty of solutions, it’s just trial & error to see what fits their system & trading personality. Some like set & forget, others monitor trades & some have a higher risk appetite - the possibilities are endless.
Regardless of the outcome, GP hit the nail on the head, “Nobody Ever Went Broke Closing Their Trade in Profit”.
No pun intended against kotlt and I was far off from being unfair. (if it sounded that way, my apology) I did read it more than once. The reason I was confused because the way it was presented sound like martingale trading strategy. Of course, if it was martingale, I would agreed 100%. But of course, any method if you consistently exiting the trade too early you can end up in the negative balance. Like you said “Let your winners run” until it hits TP. I, personally myself, use Trailing Stop to locked in my profits at a certain point.
It is ok to book profit. Bail out when you don’t feel right. Trust your gut.
After booking profit, no regrets after, whichever direction price goes.
When you have no position, your mind and soul can rest. There is a peace of mind. You can enjoy time with loved ones better.
I would suggest another viewpoint.
Trust your plan, ignore your gut. And what are the objectives of a good plan? -
It is not an objective of a plan to not lose unrealised gains. Ignore unrealised gains.
If you have a profitable position and price remains in the trend, pyramid.