This is a question for seasoned veterans that I feel will help me and as well as other nonseasoned traders struggling in the markets. When do you take profit?
In my case, I do not seem to understand when to take a profit. This has plagued me for quite some time since I moved into discretionary trading. Lets say a position moves in my favor quickly (in 4 hours). It is meant to be held for more than a day, less than a week (swing trade). Lets say it went in my favor 80 plus pips. The 4 hours, it moves against me, stopping me out (using a fixed stop loss).
This usually happens to me, where I immediately go into positive territory but since I want to hold on to winners I get stopped out. For some strange reason, when looking back a many of my mistakes, I sensed that I should exit during those immediate moves.
I always wonder how you make money by holding on to winners like so many traders say. I know it doesnt help me.. however, it may have helped others.
When I go back and analyze my trades I always find that it was best to take the earlier profit which is usually greater than a 2:1 risk reward ratio. So if I did take profit it would have been a pretty good trade.
And so, I am left confused when the advice is to hold on to winners because taking profit too early is a result of fear of losing. Is this my case?
In my case, I do not seem to understand when to take a profit. This has plagued me for quite some time since I moved into discretionary trading. Lets say a position moves in my favor quickly (in 4 hours). It is meant to be held for more than a day, less than a week (swing trade). Lets say it went in my favor 80 plus pips. The 4 hours, it moves against me, stopping me out (using a fixed stop loss).
This usually happens to me, where I immediately go into positive territory but since I want to hold on to winners I get stopped out. For some strange reason, when looking back a many of my mistakes, I sensed that I should exit during those immediate moves.
I always wonder how you make money by holding on to winners like so many traders say. I know it doesnt help me.. however, it may have helped others.
When I go back and analyze my trades I always find that it was best to take the earlier profit which is usually greater than a 2:1 risk reward ratio. So if I did take profit it would have been a pretty good trade.
And so, I am left confused when the advice is to hold on to winners because taking profit too early is a result of fear of losing. Is this my case?