When do I take my profits?

Hello

I wanted to know that If invest £100 in shares and make £60 in profit do I close the trade and take my £60 profit or do I let it run until it reaches over my initial investment or even till it doubles and then take the profit?

I take profits when I see a change in market structure. For example, if I am long the Eur/used on a 4 hour chart I watch the 30 min or 1 hour. If price action moves sideways and sets up short term S/R then I either move my stop to break even or close the trade and take profits. Which one of those I do depends on market fundamentals.

Safety is concerned by your steps when trader decides about profits and close positions he has to do right steps… He can even come out of market with small take profits. I feel happy with this way because I had saved my self from a big risk waiting for high profits. Analysis and techniques that we use in trading are useful to set take profit with ease.

Why did you buy them? When the basis for that decision changes, that is the time to consider selling.

But remember that the profit can go from +£60 to zero - what will you do as it starts to reduce to £50, then £40, then £30? Will you even let the profit become a loss from your £100?

I see, you are very new. Pleas close that trade ASAP and then start learning in demo or any cent type live account, then go for live.

As you are talking about stock, you have to decide what kind of trading you want to do. Day trading, short term trading, mid term trading or long term trading. When you buy a stock, you should know why you are buying the stock and how long you will hold it. If you don’t know what you want, you won’t make it.

Day trading. I want to hold on to a stock until I make a small profit. Even if its small as £40 or £60 and take the profit.

Is it OK to trade that way? For now I just want to make some small quick profits, take some of the profits and reinvest some.

No one can tell it better than you. It will greatly depend on your trading strategy. If you want that you will require your initial investment will be double do wait until market changes in the negative direction. But try to use risk management modules like stop loss.

That’s not proper way, you have to close your trade when the difference between buyers and sellers will be smaller.

So basically when the trade turns the opposite way?

I basically take my profit when I see strong counter impulsive moves continuously.

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IMHO, i think there should be a pre-determined date or time to close the trade.
Regardless of the net gain/loss. For example,

  1. daily close timing
  2. just before the next market session opening hour
  3. just before the next high impact news
  4. end of week

Re-assess market conditions for another re entry on the same currency pair or a different pair. Decide whether to increase the lot size or not.

If its regardless of profit or loss, doesn’t that mean you lose money? Or don’t take any profits or you lost more than you invested? So isn’t the logic to always take profit?

It can mean you make money as well.

My point is to reassess market condition at predetermined time interval. Purpose is to check if the reasons for entering a particular trade is still present. If yes hold on to the trade and if not exit the trade.

How you choose to trade depends on your availablility. Most people are not full time trader or aspiring trader (family man/woman) who doesnt have much time on their hands.

I’m speaking from a trader’s perspective. To spot a stock like facebook or forecast a major economy going down or up versus another major economy. Thereafter, invest and hold on for 5 to 10 years. That is call position trading or investing i would coin it.

There is no holy grail. When market trends everyone is a genius. When market is choppy, are you able to abandon ship and board another ship?

Last but not least, i want to emphasize this: WHEN you enter/exit a trade is just as important as at WHAT price you enter/exit a trade.

You must have to do small investments in the forex market. If you do so than you can save yourself from big loss. This can also helps you to earn profit from other investment if you lose in one investment. I hope you do so as I said.