Do You Close Your Position Daily?

Beginner Questions
1

Hi,

I tend to close my open position/s daily. So far this has help me to gain more than losses.

I am thinking, is it better to close position daily or to leave it running for more profits? :confused:

2

Hello gbpeurs,

My advice for you would be to read more about money managements, including T/P and S/L levels. Because actually there is no such thing as good time for a position to be open, firstly it is up to your trading style.

And there are 4 trading styles:

  1. Scalping (They keep position open in minutes or even seconds)
  2. Day trading (They are used to open and close position at the same sesion)
  3. Swing trading (They may hold trades for days)
  4. Position trading (They may hold trades for weeks, months)

And after you decide which tipe trader are you, the time you open and the time you close a position is up to your trading plan.

And donā€™t forget you also may have to pay if your position is still open after New York session.

Please ask if something is not clear.

Thank you,
Albinas :slight_smile:

3

Thanks Albinas for your advices and sharing. But if you see the currency pair you trade are trending your way, will you take profit or wait?

Does that mean if you are a Day Trader, you will surely close the position? If you are Swing trader you will hold the position with trailing profit stops?

4

I hold my position till the profit is worth the risk I have just taken. Sometimes that can be 1 week or 5 mins . The hardest thing I have found to over come is closing a trade out when it has just turned a profit, only to have it keep going my way. Exp closed a trade 2 days ago with 2% profit , if I would have held out a little longer it would have closed at 10 to 11%.

5

gbpeurs,

One if the most important things in forex is discipline, so no matter is tren in your way, or now, if your strategy tell you to exit, you have to exit.

To make it clear, lets make an exaple.
Lets say you are a day trader (you open and close the position at the same sesion). You wake up, open your platform, and start searching for trading abilities. And lets say you are using very simple strategy, 2 EMAā€™s with 5 and 8 periods and stochastics. BUY signal when 5 EMA crosses 8 EMA from bottom to top and stochastic is in overbought and vice versa with SELL signal. Time frame- 4 hour.

Take profit level-80pips
Stop loss level-60pips

So when you find trading ability, open a position and set S/L and T/P levels, all you have to do is to do what your strategy tells, and in this example it tells you to wait. And no matter what happens, you get scared of S/L triggered, or you feel greed when price moves to T/P- you donā€™t do ANYTHING.

Is it more clear now?

Thank you,
Albinas :slight_smile:

6

JFXnc, Donā€™t you think you are gambling?

7

How so? Donā€™t understand what you mean.

8

so what do you do if the trade goes 40 pips in your direction and then reverses? You didnt get your 80TPā€¦ so now you wait for your SL to get hit?

good way to lose moneyā€¦

There are many many ā€œrulesā€ to trading, but there are two very simple ones which Iā€™m sure you have heard before:

  1. Never let a winner become a loser
  2. Take profit often

Cheers

9

Cdawg,

You are right, because some strategies do need to take profit earlier, but not all of them. For example, Sunday brakeout strategy. You can be in 200+ pips profit ( hard not to move it into the pocket :slight_smile: ), but if you do close the position and T/P level is still quite far, then you will still be a looser in the long turn. Thats because the purpose of that strategy is to be patient and wait for the position to be closed by S/L or T/P, in long turn number of bad trades is bigger, but profit of few good trades ā€œengulfsā€ your deficit.

And I am saying this because I think strategies that have to be managed to close by your own is more for ā€œbigā€ boys ;), and while you are new and try to declare a peace treaty with your emocions, itā€™s good to know your are now responsible for wrong exit pushed by fear or greed.

Thank you
Albinas :slight_smile:

10

JFXnc, you said ā€œI hold my position till the profit is worth the risk I have just takenā€, as I understood, when you start trading you just open a position, and wait till it gives profit? Or I am misunderstanding? :frowning:
Because such a ā€œmethodā€ can only be profitable in demo account.

Thank you,
Albinas

11

What I did with my previous trading is I take partial small profit quick if the direction is right and set my S/L level. I will also leave the rest trailing.

This work very well with stocks market but I have yet to try on forex market.

12

It dependsā€¦i donā€™t mind holding a position over night, but I never hold one over the weekend, too much timeā€¦
When I was a newbie I had more troubles with rollover. Such a problem calculating themā€¦ if you are a newbie look for a broker that publish the overnight rates for each currency pair, mine does, I trade with ACM, but I think most brokers donā€™t so that is why I said look!!!