Im sure you’ve heard this discussion all before…Taking Profits… I trade using daily candles. The whole 2:1, 3:1, 4:1 etc. ratios doesn’t really apply to my style of trading. Not that I don’t think they’re attainable its that some strategies want you to set a certain ratio and let it ride regardless. I have 4 ideas of taking profit once profitable.
Once I’m profitable just let my profits run and keep upping the stop to the low of the previous candle until I’m stopped out.
Once profitable and I break even I add more size to each candle that in the directions of the trend/ profitability. This offers a great way to make money in the “right” scenarios.
Once profitable, I take 1/2 of my position off and let the rest ride until my increasing stop is hit. Pretty much Scenario 1 after I take 1/2 profit.
Treat each trade as a new entry. For example you enter a long position on a trend. You risk $10. The next day you’re profitable $4. The next candle goes in the direction of the previous trade/trend. You reset your risk to $10, add some pairs and check your profit/loss the next day. This one has its own merit but not a big fan of it.
Each one works well in different scenarios so its kind of hard to pick the overall best one. My money is for #3. it gives you definitive profit and offers the opportunity to let the rest ride.
There isn’t a “one size fits all” answer, I’m sure.
One has to try to backtest and forward-test and see what works best overall? (Which isn’t always easy, in itself.)
I routinely use a (kind of) combination of the methods you describe above.
I tend to close about two thirds of my position in accordance with a “fixed” target (it isn’t [I]really[/I] “fixed” because it’s actually defined by the volatility at the time of entering each trade, so it’s only “fixed” by that, but it’s not necessarily equal between different trades), and then let about the last third run, trailing its stop manually (not as you do, according to the last bar, but just above/under the most recent swing-high/low, so I’m giving it a little bit more room, on average, than you are). For what it’s worth (if anything. )
I don’t disagree; but this thread’s about when to take profit on [I]individual trades[/I] (i.e. when to close profitable trades), not when to withdraw profit from your account.
I trade from constant-volume bars which aren’t timed but take current transaction-volume into account without the need to display “volume” separately, but they’re roughly equivalent during RTH to about 5-minute/10-minute bars.
I switched from spot forex to futures to be able to do this, but when I was trading spot forex (for years) I used M5/M10/M15 bars. (I only trade intraday, never hold positions open overnight, and my trade-duration is anything from about 5 minutes to 5 hours, with the average nearer the lower figure).
For myself, I strongly prefer bars to candles. Both give exactly the same information, of course (i.e. the open, high, low and close for each period), but candles visually accentuate the opens and the closes, which are user-defined and more arbitrary, whereas bars visually accentuate the highs and the lows, which are objective, factual and in my opinion much more significant and helpful.
Thats an impressive way at looking at the charts. Ill have to check into that. I used to be a day trader in the stock market so I know how important volume is. In all reality I never thought volume would matter much on the scale of Forex. Im trying my hardest not to day trade forex with the exception of 4H candles. If I were to day trade forex one thing Ive found that works more than anything is to look at the major pairs and using 15 Min candles and find the best/clear trend and just go with it and move each stop to the low of the previous candle. Simple but surprisingly effective.
Oooh, I see! (Isn’t it interesting, the things you sometimes learn about fellow-members, here? ).
I’ve never traded a stock/share in my life, but I’m sure volume’s [I]far[/I] more significant for them than it is for forex (which has such a huge market, by comparison). I just like constant-volume bars for the subjective reason that one doesn’t need to think about the time of day or market volumes at all, to trade from them, and for the objective reason that switching to them increased my overall monthly returns by over 30%, on average, for the same risk-exposure.
To be honest, I’d never thought about it much, but ex-institutional trader friends (who had seen all my records and understood how I trade) recommended it so repeatedly and insistently that I felt obliged to try it, and of course ended up wishing I’d done so years earlier. :8:
I’m not for a moment suggesting that intraday is any “better”.
It just suits me.
In general, for forex as for anything else, the longer the time-frame one’s trading, the more reliable the signals are, but trading-frequency is another story, of course. I like relatively frequent trades with small position-sizes to minimise risk and maximise sample-size, to exert my edge “little and often” and have a very smooth equity-curve. I’m particularly conservative and risk-averse, hate losing days, and am available all day to sit in front of charts, so this approach suits me well.
Yes; I can well believe it. (I trade bar patterns mostly based on break-outs of localised S/R and post-retracement trend-entries along the lines of “Ross hooks” and related patterns - all price action parameters.)
I used to use Oanda, when I started, for spot forex: I did loads of research and due diligence and I think they’re one of the best counterparty market-maker spot forex brokers.
I also do some spreadbetting (I’m in England and it’s tax-free) with LCG (formerly known as “Capital Spreads” but owned by LCG for many years).
I switched from trading spot forex to trading futures, just so I could use constant-volume bars instead of timed bars, and basically “not have to think about volume much, any more, because it was automatically factored in to my trading”.
I did this last year, on the rather repeated and insistent advice of institutional and ex-institutional trader friends, who were very familiar with my trading-style and records, and I promptly wished I’d taken their advice on this subject a long time earlier, when it was first offered. But I’m [U]really[/U] hard to teach and have to work things out for myself, in my own time. :8:
It’s been very beneficial to me. I do almost exactly the same things that I was doing before, and my average monthly returns have increased by more than a third, from the same degree of risk-exposure.
Above a certain position-size, yes - very much so.
Most independent traders who trade futures are paying something like a $4-$5 commission per round trip (i.e. for opening and closing an individual trade), without paying the kind of spread that people pay counterparty forex-brokers, where they’re often effectively losing 1-2-3 pips on a round-trip. (Dealing costs weren’t really much of a factor in my own reasons for switching, though, to be honest.)
As against that, there tend to be much higher minimum deposits for account-opening.
(I had actually switched to Interactive Brokers, to trade spot forex there, long before I switched to futures, and long before they announced - very recently - that they’re withdrawing spot forex for non-instututional accounts. I only read their thing about it briefly, since I no longer trade spot forex, and I don’t even know the details.)
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