thelearner wrote:I think the problem with everyone is deciding to cut loss and take profit after the order is filled. Entry is very simple now that bob gives few examples, I guess even new trader will be able to understand why the trade was taken. The hard part is when will we decide to multilevel/recover trade or just cut the losses. That is the main different between the pro and newbies like me. Maybe could start a thread on how to manage the trade after entry.
For me the entry is pretty CLEAR and SIMPLE and NB couldn;t possibly make it simpler. It is time to learn the management from here on (am I getting ahead here? LOL).
I hope steve,Nb,Jemook,etc won't mind sharing their thoughts on this as we can see this is the part where traders struggle with.
Regards ~
You are right. The key to taking profit really depends on what kind of trader you are. I simply play the odds and this is what I find happens most of the time in Forex. Unless I know there is a strong fundamental working on the currency. For example last fall's Euro run and the now run on the AUD.
1. I will take my profits fairly quickly. The reason is over 70% of the time price is going to range. What that means is it will only go so far and then retreat. Profits will be 20-60 pips on the norm. The last time I checked which was last spring, my average profit on a trade was just under 40 pips. The vast majority of trades will stop at R1/S1. So I will just take them, look for the retrace and take another trade the next day. In trading circles you could call that being a singles hitter. Risk to reward ration means very little to me. Will I let trades run longer than that? Yes I will if I know there is a strong fundamental working on the currency pair. The Aud right now is having a strong fundamental that will last a couple of days to a week or more. So most of my pips are being made there.
2. I take my profits more on time of day than position on the S/R lines. 3-4 hours into a session seems to be the high point of a move during a trading session. I take them and look for a retrace to reenter the next session or next day. So the trade enters, runs up during a session, I come back 3 hours later and ta da profit. Do I sometimes lose out on a bigger move? Yes but most of the time it will retrace and be done. I have been trading the aud and nzd pairs almost exclusively for the last 3-4 months that way. I know they cant go much higher because of the economic slowdown so I dont have to worry about price running way up on me. (They are both way over bought) I use low leverage so I dont have to worry about swap costs. So it is just a matter of keeping those sells going after every retrace. 18 trades on all the aud & nzd cross pairs so far this week and 14 have been for profit. None of the trades went over 50 pip profit. I quit selling when price reached S2 levels. The chances of price going to S3 is really rare even though aud/chf made it there. The other auds made it to S2 and nzd were weak with only one making it to S1.
So that is what I mean by playing the odds. S1 is a good thing almost all the time. S2 if a strong fundamental is at play. S3 or more if price is just collapsing for some reason. 3-4 hours into a trading session will usually give you the max pips on the move. Aud Nzd can also move during their sessions. So that is how I profit. |
thank you. 
