Pro's and Cons of Partial Close?

Can a couple of wise souls debate the pro’s n con’s of a partial close order please. I’m using a TP level between 50 - 100 pips and have watch many a trade come within reach of TP but then turn and hit my SL. Wondering if a partial close order would help prevent some loss. Thanks

Mathematically speaking, there’s no added value whatsoever in scaling in/out. All you’re doing is dividing your position into different components. Each component has to be a profitable trade in order for it to be justifiable. Money management by itself will not give you an edge in the markets.

The psychological part, of course, varies from person to person.

I’m an advocate of partial stops, but I know many on this forum dislike them. From my point of view, the first priority for a trader is capital protection and opening up two positions can really help do this because you can get one of the positions to break even quickly and leave the other one looser in case price takes off.

My own strategy has the first SL follow price fairly closely once price moves into profit so that if it gets hit I’ve usually banked a profit. More importantly, I’ve reduced my risk exposure should price continue to move against me. The second position follows more slowly and gives price more space to breath.

If price moves favourably and I’m able to get the aggregate of my stops to break even, then I’m free to scale in again on pullbacks, always reducing my risk aggressively and adding in when I can.

I undoubtedly allow some profit potential to escape when a big trend move happens, but these are comparatively rare compared to failed trades so, in the long run, capital protection is usually more profitable than taking full hits on losers while hoping to be on the “big one” when it comes.

I’d recommend that you backtest your strategy using both methods and record the results. You may fine one approach is much more profitable than the other or that they equal out. If it’s the latter, then decide an approach based on your psychology. If you hate taking full hits and like taking frequent, albeit smaller, profits, then trade a system like mine. If you hate seeing runners head for the stars when you’re not fully on board and prefer bigger, infrequent, pay-days punctuated with lots of losses, stick to your original system.

I never learned how to partially close a trade. How does this work? Does it mean I have to open similar positions?

In Mt4, right click on the order and select “modify or delete order”, change “type” to “market execution”, input volume that you want to close.

I would assume partial closes are more geared towards that of longer term traders as apposed to day traders who hold for less than perhaps 24 hours and are aiming for between 50-100 pips. Crystallizing profit by a partial close when you are a few hundred pips in profit seems more logical, rather than letting price run all the way back to your entry price for a break even trade. Pointless in my opinion when day trading, you may as well go for a home run when trading such a small period rather than 2nd base.

Thanks bro for your response. What if you were prepared to hold a trade for 3 or 4 days for 50 - 100 pips. Could you argue that if you where trading long under a resistance level a case for banking some of the profits like on the current USDJPY daily chart. Yet it the price broke out then have faith in ones system and capture the pips while they’re there?

At the end of the day there is no hard and fast rule as to how many pips a typical day trader should be aiming for to class them as a “day trader” - it does on a technical level come down to the FX pairs typical volatility. When I said a day trader usually aims for around 50-100pips in less than 24 hours I was basing that on the current range of the majors etc. I personally target between 50-80 pips on a single day trade, with no partial closes.

What you need to consider is this. Is it sensible to hold a trade for 3-4 days for only 100 pips when the average daily range on that pair is say 100 pips? Even though stops are usually used in terms of pips, I like to use a stop based on time. If your trading from a 1H chart and price has not moved to your TP in under 24 hours is the trade still really valid? It would be a different story if you were trading a daily chart, you would never expect your TP to be hit in 24 hours, perhaps weeks or months.

Also, as you suggested trading a long position under a resistance level where there is going to be sell interest, why would you want to take such a trade with no confirmation that the resistance is going to be broken. I would rather wait for the resistance to be broken, and watch it turn to support as a ledge of then going long. The odd’s of “guessing” that S or R will be broken are less than trading when S becomes R or when R becomes S.

Think I hear what your saying Bro, better off filtering out those false trade signals that relying on practices like partial close. Thanks for your views, much appreciated.

Not so long ago, I was a staunch believer in always aiming for profit of at least double the risk.
Over the last 3 months or so, since learning to code in MQL4, I have lost count of the amount of EAs I have written.
What I have learnt from testing these EAs is that all too often a trade will go well into profit and then retrace and hit the SL. So I am currently revising my trade management.
I think that The DayTrader’s post is sensible, but I find tight trailing stops often do not work so well.
I will be looking to taking partial profit myself.
Ie If I have a 25 pip SL and 50 pip TP, I will close half the position at 25 pips, but leave the SL as is. This then means that even if the SL is hit, it has been a free trade.
I will not move the trade to BE because when trading a break of resistance, that resistance often acts as support, so give it a bit of space to prove to be support.

Hi bun when I do as you say and go to type I dont see “market execution” only
modify order,instant exicution and pending order. Where do you think Im going wrong ,cheers for any reply.

They’re the same thing, I use Oanda MT4 so it appears as market execution on my platform.

I don’t tend to like partial closes. When you draw out your trade plan you have normally factored in closing the entire trade. If you start adding in partial closes to make yourself feel better then your trade plan is out of the window. Of course, if your trade plan is based on partial closes its fine to do - however it offers no mathematical advantage over a full close and is more difficult to work out.

first of all : this is not advice, everyone is responsible for their own decisions

second : i focus on one pair only, no matter how tempting another chart looks. im just listening to a discours on market psychology from someone here, maybe its to do with something like that

I personally take trades no bigger than 25 pips and i hardly ever place a stop loss up front, i try to stay within a certain range. i have an account with no swaps/rollovers so trades can roll for years without loss or until they hit the limit. I use small lots but try to get in a lot of trades, not like scalping. My brokers rule on scalping is scalptrades are trades under 10 pips open for less than x minutes so i can imagine thats not the same for everyone.
I dont know my exact win loss ratio for all last months but for september i seem to have had 21 trades closed in plus, 1 closed at zero again, 1 closed at min and 11 closed before they hit.
i also had five trades still open at the end of the month, a few of which are closed by now and some who will have to be if a meteor hits the united states or something similar like total flippage ramming it down towards 90 again (usdjpy), i always have running trades (no swap). I hardly ever buy at market price but a lot around the same type of levels, not seven decimals behind the comma according to some advisor but plain 00, 25, 50, 75 and then take 25 pips or 20.
I dont have a lot of money so i cant say if the psychology for me would be the same if a few zeroes were added to the capital. I rely on hardly anything but trendlines, fibonacci, bloomberg and websites like these, i have no automatons. The capital increase there was about 13% i sometimes have four trades open at once on the conviction that it WILL retrace (very dangerous) but so far it works, i burnt out once overcourageous having like 25 trades open but i can refrain myself from doing that now, id rather put in a short to counter a long than put in a stop loss since i dont pay swaps and if you put it like that you ‘lock’ a part of the capital BUT if it gets back you can still save it to the point where you lost nothing, at best you lose what you would have lost with your stop loss but you get like a second chance, you have to take into account the fact that everything between the short and the long thats stuck for the time being is no longer part of the capital. Its a crazy thing i suppose but i dont read about anyone who just focuses on one thing to get ‘the feel’ of it either

if youre not a crazy basterd or play with millions or have to pay nightly rollovers this is probably a very bad idea but even with 5 trades 400 pips below i rarely risk more than 25 or 30 %
range trading, i dont know what it is, if it keeps working ill keep doing it (no i dont have that ratio every month if i did i would … well change my name to buffett maybe)
to keep it short : yea, i think take the money and run tactics are to be preferred over jigsawing back to the stoploss because you didnt hit your exact target. Every time you do you get more to play around with and losing out of greed for a few pips or even a few tens means you got nothing at all
gotham joker trading … i like those odds

i also believe theres only one way of trading and thats what you feel comfortable with, like morals or poly-religion, you pick the best bits of everything, no ones gonna sue you for copyright infringements
i try to be awake for most rush hours or crossovers like london new york, i put my alarm clock at 2am then go to bed at nine or something to wake up at 2pm again and try to get some sleep at 9 since theres little movement you cant put in 15 trades a week if you spend three hours watching it im quite sure of that
im very uneducated (not so say uninterested in terminology, it makes me very unscientific-) but somehow confident that i have a little above average pattern recognition skills so i dont know what a 200sma is to spot a rising trendline on a monthly while its not on the four and it is on the hour, anything below that timeframe is fairly unusable, maybe for 10 pip trades it is so if you’re not like me, i would REALLY advise against it, im not bigheaded, believe me lack of terminology makes people take you not seriously
if you cant afford to spend all those hours checking on it every hour or thirty minutes then this is definitely not [I]a[/I] way to go but i do still believe that take the money and run gets more than being strict about everything in something that is fairly unpredictable. Stop losses too tight give me nightmares they always seem to whip back.
take the money and run mate, then look for the next opportunity, very unprofessional probably, i prefer out of the square and when more money ill probably take less risk, im not telling anyone what or how just this is what i do right now
dont risk your kids college fund on a get rich scheme thats all id like to add to a way too lengthy post im absolutely sure fx can make someone a living but im just as sure its not for everyone. If its for me ill find out somewhere in the future

Since my trading plan IS based on partial orders (thank god for this thread - now I know partial close is possible), I was just wondering - is it possible to open one position and set 2 or more partial close orders on MT4? E.g., one long 9,000-unit trade and, say, 3 take profit orders each for 3,000 units (partial) at different levels?

Thanks to all who have taken their time to reply. Guess what I’m hearing is that if designed in as part of a strategy to keep risk to a minimum then partial close can be a very useful thing. Other than that there is no real benefit in it’s use

i read the part where someone said it stays the same since you go for the same amount of pips but theres one more ultra evil secret of the gods to consider here may they never find out i spilled it lest i be chained to a rock like morgenstern
if you go for a 100 pips you have an entry and a target now
IF you close every 25
you might get like 3 times the first 25, 2 times the second, 1 time the third and 2 times the fourth as it oscillates up and down towards the target , in total this gets you eight times 25 pips = 200 by the time you get there and IF it does not then you will at least have had (maybe) three times the 1 st 25 = 75 before it lashes back to your stoploss losing you that same 100 or whatever it is you use netting you in fact only a 25 pip loss.
maybe not but still basic math , now forget i said that and this conversation never happened. You can NOT do that unless you have LOTS of time to be checking and i still feel everyone should go with what they’re comfortable with since that will remove some weird stress-based maneuvers as well as a lot of indecision
remember : we were never here, and this conversation never happened