Take profits in parts

Hi friends,
im using Metatrader 4.

My question is:
I it possible to take profits in parts?

[U][B]Example:[/B][/U]
-I open a trade (0.1 standart lots) because i get good signals.
-The trade goes well for me up to +500 pips.
-Then it changes direction.
I cant know if its just a retracement and the trend will continue.

So my idea would be something like:

  1. Liquidate 1/3 of my position at +480 pips or something.

[U]Why? [/U]
To make sure i get something of the profit and stay in the trade at the same time. If i close the whole position i eventually miss a big trend. Also i can cover possible losses with this right?

[U][B]So my trade could continue in two ways:[/B][/U]

  • Its going against me and i liquidate the other 2/3 of the position in steps.
    (when + 200 pips and break even are reached, for example)

or

  • I can stay in the trade and ride a good strong trend with 2/3 of my position.
    Which should be my goal.

Question is now how to do it.
My attempt would be, that i open 3 positions when i get an entry signal.
But that would possibly lead to a point where i loose track of all my positions.

So it there another way to do it?

And more important:
Am i talking bull’!%& here? Does that make any sense? :stuck_out_tongue:

That would depend on your broker’s standard lot size. One of them would allow you to enter with 0.1 lots, and exit in 3 stages of 0.033 lots each.

if i understood you correctly, this is what you want to do. sry no audio

jado85 03/12/10 12:19PM, jado85 03/12/10 12:19PM jado85 on USTREAM. Traffic

I open my trade with the max risk I’ve pre-determined at 2%. I always have an idea of a “best case scenario” target, and then I take profits and tighten stops as price hits and breaks S/R levels on it’s way to my best case scenario target.

Taking profits as the trade moves in your favour is definitely an edge in itself, but be careful not to take too much out, too fast. Remember, you still are looking for price to reach your target, but are taking profits off “just in case” things go sour. That’s why I try to leave the majority of my position open til at least HALF-WAY to the target. Then I start taking larger and larger chunks off. I prefer to exit as price is moving in my favour, so if I’m long, I’ll be looking to exit into rallies. My stops are widest when my trade is first opened, and quite narrow when price approaches my target. This makes sense because if I don’t expect too much more potential out of the move, then why would I have a super-wide stop loss? Risk:Reward has to be taken into consideration the ENTIRE time the trade is open, not just at the beginning.

Otherwise you might be sitting there waiting for your trade to move 10 more pips just because that is your target, meanwhile sitting on a 100 pip stop loss to protect the profits you have. You wouldn’t take that ratio at the start of a trade, so don’t squander your profits when you are sitting on them!

Hey all,

thanks for the really nice replies.

Thanks [B]akeakamai [/B]for the good explanation and tips.
Now its late at night and i gotta go to sleep, but tomorrow i’ll work/think all this trough. Thanks a lot!

Also big thanks [B]jado911 [/B]for the video!!
No-audio doesnt matter, i think i can understand what youre doing there.
Ill try it on my next demo-trade.

Oh and yeah i should look up the work “SCALING IN/OUT”, as mentioned. Thanks for that!

I think it would make a lot of sense, as long as you don’t end up splitting your positions in too many bits

Another idea would be, once you are in profit - close out the position and buy calls/puts with some of the profit to keep the upside and “lock in” a part of the gain