When to close your position when in profit?

I am having difficulties deciding when to close a position when in profit.
I guess every profit is good but are there any hidden rules? Like in percentage
of the order value, margin etc?

The short, simple answer is that you exit when your system/plan tells you to exit.

If your system/plan doesn’t tell you when to get out, you need to do further work on it. The exit should fit with the reasons and objectives for getting into the trade.

I agree…

If you are entering a trade with a stop loss in place then you should be entering a limit order to take profits, say your reward to risk ratio is 2 to 1, then you could have a 100 pip stop and a 200 pip limit order for taking profits. Others might let the trade run locking in profits along the way with a trailing stop. Breaking of a moving average might be your take profit signal, or a bearish candle ( if your long) could be your signal to exit. As rhody said, this needs to be part of your trading plan. One final word, you will never sell at the top so don’t have traders remorse when you take that 200 pip profit just to see price move up another 200 pips. That is just part of the game

Generally, if you have a set strategy, it should be able to tell you when to close your position and get out. Most good strategies do that. Apart from that, I, personally, always follow levels of resistance and support and if I see that the price is close to a major support and resistance level I play it safe and close my positions.

I believe that you probably have heard that every single trader should have his/hers own strategy, so that means you should to, which means you should know upfront which requirements need to be achieved in order you to get in or out the trade.

It depends on the strategy and the analysis you work with. But strongly recommend to trade the higher time frame chart for beginner

Set a target before entering any trade, the best to save yourself from any mishap you should break even your trade or close some part of your trading when you get in some profit.

Yes always trade with plan trading to managed account, before placed new order as trader will analyze the market and then making plan trading included use stop loss and taking profit, it will making more comfortable although trader leaving the chart

Very interesting thread. I had this experience last week with a good advise, cause i’m having problem closing my profit.

Yes! its all in our strategy and plan. Let me try to recall what others good advise from me.

  1. first things first you earn a profit then it didn’t reach your limit, after that the market starts to go against us. What to do?
    Simple, grab the profit even it gives us a profit of 1 pip. Its still a winning trade, no matter when the world goes around.

  2. When we profit already a 20 pips winning trade that looks like a decent amount, grab it. Grab the profit. Our 20 pips per day is worth, compare to hold the amount for overnights to gain hoping 100 pips that is uncertain when theres a non sense direction for tomorrow.

  3. Make our own strategy. When we are trading alone. We are the one who pulls the trigger. There is a certain chance that the market will breakout or turn against us. Its our call. Lets stay discipline and Trade Hard. For example, I have been sitting more than 12 hours in the morning till night and just to see any entry until the last minute, its boring and sleepy, then a setup was made after i saw a good entry. Bingo! Profit ed. :slight_smile:

You should have a plan for every trade. After the deal complete, you can compare your plan with the result.

My strategy exactly…

Good point. That way you can figure out what went well and what can be done better next time you trade in a similar situation.

Create a plan, stick to it, and make sure that the plan is part of a strategy that should work most of the time.

1/3 or 1/4 of daily range would be a very decent daily amount.
For examples,
Average daily range is 100 pip, 25pip or 33pip daily would be lovely.

Alternatively, close trade
2hr or 3hr before tokyo market closes
2hr or 3hr before London market closes

Hello, very interesting post!

What do you think about best time frames for trading? which one is better?

that’s why every trader need to follow their discipline and strategy. Set your own rules and trade based on that.
if you dont follow your own rules, you earn much money than you expected and even lose much more than u can imagine.

I am also still use plan in my trades using stop loss and taking profit this can recduced emotion because already in plan, but if get lsos indeed still having feeling to regret and disapponted, but sometime I am use cut profoit and loss manually if still in front of computer

Okay so one method is putting a trailing stop.

Another is using price action, if you know how to read charts properly it will tell you when you SHOULD exit.

If you are using money management like per say your strategy involves a 2:1 ratio then it should be subject to price action in my opinion.

More methods are using EMA/MA crossover lines, patterns, even indicators, etc.

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In my trades i had done the analysis correctly but then somehow the markets were not moving in the direction of my trades and i got losses.

My account was saved due to the use of the stop loss :slight_smile: