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sindutzz Oct 9, 2007 7:06am | Post# 1

Open 2 trades, close 1st trade on TP, move 2nd trade to break event ?
Actually, right now, I'm looking for the best strategy to exit for my system. Then I try to search on FF and a lot of times that some technical system founders use strategy like "Open 2 trades, use same SL, then when 1st position hit TP, close it and move the 2nd trade to BE and trail it, then you have a free ride ".

Well, its looks cool when I read it. But, for me its looks like combining 2 absolutely different strategy.

First strategy is use FIX SL and TP, and
The second is use fix SL and trail when the position in some value of profit.

In my opinion, both strategy must have positif expectancy on long term. If one of them has negatif expectancy then better we only use the positif one.
And I think it only works on trend following or momentum base system.

Am I wrong? Do I miss something ?

I tried to do some math.

Let say we have a system with 60% winning percentage which using fix SL = TP = 100 point then after 10 trades(2 positions for every trade) we will have (2x6x100)-(2x4x100)=400 point profit.

Then when we use "Open 2 trades, close 1st trade on TP, move 2nd trade to break event" strategy, let say on wining position, price always turn to open price just after hit first TP.
So we will have (6x100)-(2x4x100)= -200 point

Any suggestion will be appreciated and sorry for my english
Thank you very much


treypip24 Oct 29, 2007 7:51pm | Post# 2

I do the same thing. When my TP is hit i close half of my positon and move my SL to break even. This locks in profit and gives me a free trade. Price will either continue on in which case i'll take profit or if price does return to BE ive lost nothing.

mrgreen Oct 29, 2007 8:54pm | Post# 3

sindutzz: your asking the right questions...
The pros and cons of this method of exits was discussed here:

And here:

WHTenn Oct 30, 2007 12:05am | Post# 4

Actually, many traders use this method... keep up the good work!

Marrethiel Oct 30, 2007 12:08am | Post# 5

My mentor, a successful long term trader, recommends having two or even three exit strategies. As the market changes so does which of the strategies will make the most money. The eur/usd, aud/usd and usd/cad (among others) are moving fast right now and the trailing stop loss is making the most by far. In more conjested markets a take profit target often makes the best. It's all about hedging really.

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