How and when close a trade to get the most out of the market?

One of the key questions I ask traders is how they get out of positions, can they always get to the TP. If you look at yourself you will find out something interesting about yourself.

In short, there are two practical ways to manage a trade (and that includes staying within your TP).

The first is technical management:
You exit a position either when you have a TP or when there are relevant conditions to exit earlier. E.g. a position has lasted too long and news is approaching. This is technical management and its feature is that when you analyze the position afterwards it is rational from start to finish. You see that you made decisions according to your rules and if you were in the position again you would make the same decisions.

The second is emotional management.
The market started to put pressure on you, you started to feel stress and emotions. As a result, after some time you realize that you could have conducted the position differently.

This is a sign that you were managing your emotional state more than your position while you were in the market.

It means that your emotions were dictating your decisions.

Don’t get me wrong, there is nothing wrong with that. If during a position you feel bad about it you can always exit, there will be hundreds, thousands of other opportunities. Your psyche has great value and if you decided it was time to say enough then that means to me that …. It was the right decision.

Now what can we get more out of it.
If you have one or two out of every ten or twenty, it’s not a big deal. If it’s 30-40% and more then you can see that it’s starting to cost you a bit, can’t you?

You are leaving a lot of money on the table.
Frequent exits from positions before the TP is a sign of weakness, which if not worked on, will be present all the time.

In this sense, looking at your weaknesses is a ready recipe for improvement – you know what your problems are, you know how much they are costing you and therefore there will come a time when you will want to address them seriously and get rid of the weaknesses.

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Interesting read! :blush: Hopefully, more newbies see your posts. :smiley:

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Great tip. Do you have hard rules for setting a TP or does that really depend on the trade itself?

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Thanks. It depends solely on the system you are using. The rules of the system should make this clear. If this is not the case, you either need to specify it or change the system, because something is wrong with it :slight_smile: