Hi to all!
I am new of trading and I would like to ask about closing trades out. I am about one month practicing in a demo account but I just twice have closed my trades out and I am not sure if what I am doing is good, so I would like to share what I am doing.
My example: I am trading with three currency pairs and it is recommended to close your trades on Wednesdays or Thursdays at the latest, so I see my floating P/L and I start closing the least currency profitable. If the floating P/L of the currency of NZDCAD is -40.16 and from EUR/USD is -15.03, I start closing currency NZDCAD. Is that ok? or is there another pattern you would recommend to follow?. I just finished my kindergarten’s lessons.
This is a game of probabilities, so its not what price did in the poast which is important, it is what price will probably do in the future.
You might need to demo your strategy a lot until this is clearer but here’s an example. You see price at 120 and you believe it is more than 50% probable it will rise, so you buy at 120. You TA the chart and you conclude that if price falls from 120 to 117 it will be more than 50% probable it will fall further, so you put your stop-loss at 117.
Right now, maybe price is at 118.5 - so you still believe it is more than 50% probable it will rise. So why close it here?
Who recommended you to close your trades by wed or thurs? If you have a stop loss which you put in a place which negates your trade idea then theres no need to close your trade early.
A few popular ways to close trades include using take profit and stop loss orders. Using trailing stop loss to follow a trend once your trade moves to a certain profit level. And closing your trade on Friday before weekend market closing time. Obviously the best way to close your trade is in profit but sometimes it just doesn’t work out.
everything is depend on how results you had from backtest this strateg. Regards Greg