Cutting the winners too soon

Hey, it seems like i have a problem with my trading, i tend to close my winners too soon. Do you guys know any solutions for that? Its funny because i get anxious only after the positions are in profit for a bit, i dont mind when my positions are on minus, i know i have my SLs and if they get hit, well they get hit, no big deal, BUT the thought of profitable positions reversing and going on minus just kills me. Thx anticipated.

It’s all about controlling your emotions and psychologically training yourself. That’s all you can do or else you’ll die as a trader.

Something that helps me is thinking like “I made the trade logically, I set up my SL and TP through logically analysing the market. The feeling that I have about exiting my trade early with a small profit is just a product of my emotions.” I find that tends to allow me to ride through a trade.

Or you can always keep yourself distracted once you’re in a trade, watch TV, read a book, sleep, etc. :slight_smile:


A few questions for you to think about.

  1. Are you profitable overall? If you are, don’t worry too much about it. Take what the market gives, and move on.

  2. Is the trade with the longer term trend? If I get a signal and enter a countertrend trade, I’ll cut it way shorter than I would if I entered with the trend.

  3. When you enter, do you have specific t/p points in mind? If you do, and you’re up, just move the stop to b/e, and let it go. If you get stopped out, you didn’t lose any money, so go look for another.

  4. Enter a trade, set up your stops, and leave the house. Go to the park, or beach, or mall, or sleep. If you’ve done your job right, it will work out for you. These things take time, let it be:)

And one other thing. If you can’t go to sleep on a trade, your lot sizes are too big.

Sounds to me like a simple fix. Set a take profit level and a stop loss turn off computer and go do something. The savings on your electric bill alone might make you rich

We’ve all tried the [I]shower[/I] tactic, placing a trade that’s far to oversized, can’t watch it progress…only one thing to do, time to take a shower :stuck_out_tongue:

Isnt it fair to say, " You have no idea where the trade will carry you too"?

I use trail stops, sometimes good, sometimes bad. The bad is, not getting full trend profit, but who knew it would go that far…

At least profits are locked in… The trick is, to not take profit, even when the Trail triggers…

I know FXCM did a study on their retail traders’ accounts and found out exactly what you’ve said. Most people close out trades too early (and let their losing trades stay open too long.)

Here is the article I’m referring to: What is the Number One Mistake Forex Traders Make?

Use a positive risk to reward ratio. That will help set appropriate targets.

Hey Psyren.

Knowing when to get out is the hardest thing to learn in forex trading.

I’m going to tell you what works for me. You can then use this information to fine tune your trading method.

Basically what your saying is that you let the price hit your stop loss. But you exit the trade to early.

I’m under the impression your a discretionary trader. So basically you don’t have the skills yet to know when to get out.

Plain and simple.

[B]You haven’t developed had enough chart hours and experience to developed the back log of information your brain needs to look at the chart, the situation, and feel comfortable with exiting the trade.[/B]

Thats it.

I wish I could tell you a 5 step plan to exit the trade perfectly every time but there are no rules to do this. The market takes on infinite forms, and is non-linear by nature. So for me to put a 5 step plan that is linear, wouldn’t make sense.

[B]Don’t let the price hit your stop loss.[/B]

Stop loss is just there for peace of mind. If you go back and look at all your trades that hit your stop loss. Look at it analyse it, you will come to the conclusion that there was enough evidence to suggest the market has turned completely against you. But you just thought. “I don’t want to exit the trade, because what happens if it goes my way again.”

Just remember: If it goes your way again you can always get back in.

You made the trade because there was enough evidence to suggest that the trade was favourable to the upside. Why not use that same trading style and brain to suggest that the trade is in favour of going against me.

[B]When you enter the market you are saying there is enough evidence to suggest the market will move up. When you exit the market you are saying that there is enough evidence to suggest the trade has gone against me.

[B]How to keep you losses small and let your profits run.[/B]

The key is enter at breakout levels. Why breakouts? Because if its a god dam breakout, the market shouldn’t move against you!!!

If you’re only entering trades when a breakout occurs the market shouldn’t be moving against you quickly. A breakout is supposed to cause a small market rally not move all the way to your stop loss. That’s one of the reasons why I trade only at breakouts. Makes sense to get out if the market moves against you at a breakout level since the market should be moving in your direction much faster than the recent events.

If the market moves enough to suggest that it isn’t a breakout. Then you just exit the trade. Losses at breakouts are only small.

How do you make your profits run?[/B]

It is kind of similar to exiting the trade. You let the price continue to move towards your profit target until enough evidence has formed in the chart to say the market has moved against you.

This doesn’t mean you exit the trade at the first sign of trouble! If your trading end of day charts like me the price will move against you several times before hitting your profit target.

Learning when to exit the trade is harder than knowing when to trade. I only trade at breakouts and they are easier to spot then knowing when to get out. A sign to get out can look a thousand different ways but breakouts kind of look similar. The art of knowing when to get out takes time and experience. Once you become good at reading price action by default you will become good at knowing when to get out.

[B]Dont risk so much[/B]

Just in case your risking too much you should only risk at most 1% per trade if your a beginner. Your goal is to learn not make money. You could be exiting the trade early since you have risked so much money that you can’t handle losing. You haven’t learn’t how to handle losses yet.

[B]Your greedy to the point that you lose money.[/B]

When you see the price move towards you profit target you see profits! The moment you start to see those profits lose you exit the trade. Because your greedy and can’t handle seeing that ticker move against your position.

When it goes below your stop loss you are saying, i’m going to hang in there just incase the market does move into profit. I will feel stupid if i exited now and it became profitable. That again is greed.

Forgot the money and look at your method. Does your method say there is enough evidence to suggest to exit the trade? If so exit, if not, don’t. I don’t care if you lose money at least your learning the right way to do it. After 100 losses you will learn to get it right.

[B]Visualize Yourself Taking The Trade[/B]

If this is a recurring habit that is causing you to lose. Just visualise what you think might happen before you make the trade. And visualize yourself leaving your computer if you start to see signs of this habit. Then if it does in real life just leave your computer. You know that habit is a wrong perception.

I always write so much lol