Hi,
I’m progressing nicely through the BabyPips School but am struggling to understand how to take a slice of profit from a winning trade without clsoing it or relying on a trailing stop.
For example, say I’m looking at EUR/USD on a 15 minute chart and I place a buy order. My Stop loss is 9 pips and my take profit 15 pips. By all accounts the price is set to rise sharply, lets say on the back of a news event (which i would never trade by the way but it helps in this example)
Based upon this I set 3 profit targets - 15 pips, 30 pips and 45 pips.
An hour or so into the trade the price has gone up strongly by 13 or so pips, so I want to bank 10 pips of that and leave the trade running. How do I do that?
I understand the concept of trailing stops etc, but that means that the price would need to fall back to that trailing stop value before it is hit, thus losing me pips in the process.
I know I can drag my stop loss up manually closer to the current price, but again that also means the stop has to be hit, again losing me pips in the long run.
I also realise I could place 3 seperate trades using the 3 different profit targets, but that means I would have to pay a spread 3 times.
What method do you guys use please to simply take a slice of any profit off a current trade leaving it to potentially hit the next profit target? Or is this actually not possible?
But on [I]one third of the amount[/I], each time. Your overall dealing costs will be no higher that way, Simon, if you’re using your normal broker.
It depends which broker and platform I’m using. If you use something like NinjaTrader, it’s easy to set all this up, automated, on trade-entry, with any parameters you want specified in advance (and then to override them manually, if it turns out that you want to). While you’re using Oanda’s interface, I suggest that you enter separate trades, if you routinely want to do what you describe above.
(If we’re talking about broadly the same system we discussed a few days ago, don’t use automated trailing stops for it: they’ll cost money, overall - that’s been tested and proven.)
Place a market order to sell a portion of your position.
Place a stop order to sell a portion of your position at some price a bit lower than the current bid.
Breaking the trade into 3 separate trades will not increase your expenses in fx unless you have a dealer that charges a flat fee per trade (and most do not). Even most dealers that charge commissions do so based on the size of the trade, so a $3000 trade will be charge the same commissions as three $1000 trades. The spread cost is the spread size times your trade size so it also will not cost more to break a trade into three smaller trades.
You can also scale in and out of positions using different accounts to avoid any confusion extending from the fifo rule.
Hi, thanks for this.
Your mention of Ninja Trader got me interested as I’ve not heard of it before.
I’ve downloaded a 30 day trial via FXCM and it all looks good, especially the ease with which Expert Advisers can be created and manipulated (although I havent reached that far yet in my BabyPips School training)
Although with MT4 being a totally free program I’m not yet sure if the advantages of NT merit a subscription fee…
You should know according to your strategy how much profits on a trade you are satisfied with, so once your trade moves into the profit zone you should protect it. Depending on the further price movements you can act accordingly.