Hi,
here I have gathered 4 ways of dealing with the losing open trades.
1- adding more trades in the same direction of the losing trades.
2- hedge the exact opposite trade and try to manage the trades.
3- accept your maximum stop level, close all trades and go for other trades after a while.
4- add more money to your balance to manage it.
What do you guys think is the best method for closing losing trades with a profit?
this one, for sure, always
for me, averaging down, hedging and increasing risk would all be crazy things to do
i accept (as everyone should) that trading necessarily involves some losing trades
every time i open a trade, i put the stop-loss where i want to be taken out of the trade (because my entry turned out not to be a good one) if the price reaches that level - this is pre-decided and obviously i stick to it, because the purpose of my stop-loss was to be taken out of the trade where i wanted to be out of it
the important thing is to close the losers quickly (according to the pre-selected stop-loss) but let the profitable trades run
it’s not a question that really arises, for me: i’m willing to close losing trades at a loss - it’s absolutely essential for me to be willing to do that
DO NOT add to losing trades.
Yes, it’s probably a common mistake many traders make. This mistakes leads to equity losses.
If a new trade is quick of the blocks and heads towards the S/L close it down. Accept the pain.Accept you got it wrong. There’s always another trade awaiting. I hate losing, but I hate losing big more so.
However, many pro traders have studied candle pattern movements for a long time, and in certain circumstances - usually economic media changes, such as FED interest rate movements - would average down.
Not that I would ever recommend it.
Definitely! 
Do not add more trades in the same direction. Opening a position against your losing trade would be a better option, I think. 
I can’t say I recommend this for newer traders, but…
Some of my best trades are where I selected, for example, a long entry. After a certain amount of time is passed I can see that a trend has developed against me. So I open a larger trade with the trend. I do this after years of watching trades move against me and it feeling like price continues in that direction for an eternity.
My results are either I recover an amount of what I had lost or I get in on the trend I had hoped to from the start and make a lot of money.
Rarely do I add positions to a long trade that is going against me without pre-planning that I will be adding to it. If I pre-planned it, my original entry will be a smaller lot size.
when i was a newcomer in trading i lost my whole equity by this , as like me by and large beginners do same mistake at the first stage of trading.
Adding more trades in the direction of losing trades may lead to further losses so I don’t think it’s a secure way.
That’s the main point!
Like you said, “What do you guys think is the best method for closing losing trades with a profit?”
If it is a losing trade, you do not have a profit. Just close it. Take the next trade. If your methodology has a positive outcome - no worries. If it proves over a series of trades that it does not, make adjustments.
I’m subscribe to the old adage
“losing less is winning”
means that minimizing losses is a form of winning.
In other words, if a trader can reduce their losses in a trade, they are effectively winning by avoiding bigger losses and preserving their capital.
In short, close the bloody trade.
You forgot one that I know of. If your bias is long for example, but price starts going against you, you can close a partial loss. Then increase your stop loss, BUT making sure your new stop loss won’t cause a greater loss than originally intended. Reason for this is:
Regardless of the outcome, as long as your risk is normalized throughout the process, it might be a good option for some traders. This might not make sense to some people, but it’s okay, not everyone needs to understand the process.
What if you were wrong in the direction? A wider stop loss may result in trades taking longer to hit the stop level, even if the trade ultimately proves unsuccessful. This can tie up capital and reduce the trader’s ability to quickly adapt and enter new positions.
Furthermore, a larger stop loss exposes the trader to greater potential losses, making it more difficult to recover from a losing trade. Do you have the resilience to stomach a HEAVY drawdown?
In the past, i pursued perfection by targeting a higher win rate, but I now realize that approach may simply be a manifestation of greed. Incorporating a balanced approach between risk and greed is likely to be a safer strategy in the long run.
The scenario you’re describing is a tad different than the risk management I presented. The key word is “normalize” and by that I mean that once you take a partial loss, whatever the reason might be, after extending your stop loss, your new risk is still the same are your original. I’ll try to explain it, as this is where the majority of traders are not able to see it. So you enter a trade, with your stop in place, you’re risking $100. Trade starts going against you, and you’re looking at a $50 floating loss. You close half your position, so $25 loss. Now you have $75 left to equal your original $100 risk. Due to position size being cut in half, you can extend your stop loss at the $75 mark. If you’re wrong, you still lost your $100, nothing changed. But if you’re able to manage the trade, then your loss will be smaller, or you might turn it into a winner. It’s one of those things you have to try to get a better handle at.
I can relate to your experience, as I have attempted a 100% win rate before. I fully grasp the concept you’re conveying. Regardless of whether it involves hedging or partial closing, the strategy ultimately necessitates a substantial account balance to withstand drawdowns. Profitability hinges on accurately predicting the market direction. It’s akin to averaging down on the S&P; however, from a forex standpoint, execution can be challenging due to the need for considerable patience, extended waiting periods and high level mastery and execution abilities.
Believe me, this strategy isn’t worth your time; you’re heading down the wrong rabbit hole, my friend.
Alas! who am I to give advice? I’m just an ordinary NOBODY, and I could be mistaken.
You keep mentioning drawdown. It feels as if you’re not reading what I’m saying. So the key word is to normalize risk. When you take a partial loss, and move stop, you don’t move stop to a random place, you move it to a calculated level to make sure your new risk wont be more than your original risk. You don’t lose more, you don’t encounter a drawdown that’s unbearable. If you’re wrong, you simply lose the SAME amount than you would have lost if you never took a partial exit. Many people seem to have some misunderstandings about partial exits and stacking (adding) to winning trades. They always bring up “more risk” but I don’t think we define “risk” the same. Risk is simply the amount you’re going to lose. A 1 pip stop loss equal to $100 loss is the same risk as a 10 pip stop loss equal to $100 loss. People say the 1 pip stop loss is “riskier” but I see the same risk…$100 if you’re wrong. It’s just another option, that I rarely see brought up.
For those than end up understanding it, your eventual result is smaller losses and larger wins, which is one of the ingredients for success.
“SAME amount than you would have lost” Indeed, and i concur.
Floating losses . . . How long does it take before your emotional biases get tickled and cause you to cross your bottom line? In any case, to each their own preference. As long as it works well for you.
What? Closing losing trades in profit? … Simply watch the screen!
