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Taking Profits too early?

  • #61
  • Aug 30, 2017 12:27pm Aug 30, 2017 12:27pm
Quoting ThugLife
{quote} At the moment I am using Ichimoku Kinko Hyo as my indicator. But I apply the three core theories mentioned by Hosoda: Wave Principle, Time Principle and Price Principle. This allows me to have a better understanding of the market so that I can enter and exit at the right time. There are a number of different forecasting tools Elliot Wave Principle, Hurst Cycle Theory, Three Peaks and the House of Doom and the Ichimoku Theory. In my opinion, a good forecasting tool will give you an edge, whether you use price action or an indicator. This...
Nice. Thank you
  • #62
  • Aug 31, 2017 5:03am Aug 31, 2017 5:03am
Quoting Banet
{quote} Nice. Thank you
No problem
  • #63
  • Aug 31, 2017 5:12am Aug 31, 2017 5:12am
Quoting NeilWagner
In my early session of live trading I also took my TP too early because of my lack of trading experience! By the way, now I don’t close my trade manually whatever the result it is! I know, 100% is not possible here; so I am always ready for my live trading result.
That’s the actual process! Yes, discipline is the key! I think, 1st of all traders need to ensure their trading analytical quality! Then they have to follow the general process, I mean trading with the SL & TP! In addition, they should select their SL & TP based on their strategy or analysis!
  • #64
  • Aug 31, 2017 9:26am Aug 31, 2017 9:26am
Quoting ThugLife
{quote} At the moment I am using Ichimoku Kinko Hyo as my indicator. But I apply the three core theories mentioned by Hosoda: Wave Principle, Time Principle and Price Principle. This allows me to have a better understanding of the market so that I can enter and exit at the right time. There are a number of different forecasting tools Elliot Wave Principle, Hurst Cycle Theory, Three Peaks and the House of Doom and the Ichimoku Theory. In my opinion, a good forecasting tool will give you an edge, whether you use price action or an indicator. This...
Thank you for the detailed response.
As a total newbie I tried using that indicator, and, I admit, at the time I didn't understand it much and I ended up moving onto other things. Perhaps I should look into it more now that I have a bit more knowledge and experience.
  • #65
  • Aug 31, 2017 10:53am Aug 31, 2017 10:53am
Quoting mlawson71
{quote} Thank you for the detailed response. As a total newbie I tried using that indicator, and, I admit, at the time I didn't understand it much and I ended up moving onto other things. Perhaps I should look into it more now that I have a bit more knowledge and experience.
In my opinion knowledge is power therefore you should read as many books as possible. Since you are a total newbie, then my advice to you would be to learn a good forecasting tool first before you dive into the indicator department. The problem with Ichimoku is that hardly anyone in the western hemisphere uses it correctly. This is because Hosada's book has never been translated into English along with Sasaki publication of Ichimoku Studies. Elliot Nicole wrote a book, however, she didn't do a good job in my opinion. The heart and soul of Ichimoku are those three theories. Hidenobu was Japan's best analysis for 9 consecutive years until he died in 2003 and his first student Yutaka Yoshino is currently Japan's 2nd/3rd best analysts.

If you don't have any affinity towards indicators then you should focus on price action trading. My advice would be to either use harmonic trading or pattern trading. Both of them have the ability to forecast price in the future if used correctly.
  • #66
  • Aug 31, 2017 10:31pm Aug 31, 2017 10:31pm
If you take profit many times for long-run then it is good
  • #67
  • Sep 1, 2017 10:17am Sep 1, 2017 10:17am
Quoting ThugLife
{quote} In my opinion knowledge is power therefore you should read as many books as possible. Since you are a total newbie, then my advice to you would be to learn a good forecasting tool first before you dive into the indicator department. The problem with Ichimoku is that hardly anyone in the western hemisphere uses it correctly. This is because Hosada's book has never been translated into English along with Sasaki publication of Ichimoku Studies. Elliot Nicole wrote a book, however, she didn't do a good job in my opinion. The heart and soul of...
My apologies, I did not express myself properly. I am no longer a total newbie (I am by no means a pro, but I'd like to think I am a bit more experienced and educated than I was as a total newbie) - I haven't been one for a few years. What I was trying to say was that back when I was a total newbie I gave Ichimoku a try and it didn't work out, so I moved onto other things. These days I mostly use Bollinger Bands as an indicator. Once again, I'm sorry I didn't express myself better.
  • #68
  • Sep 1, 2017 1:45pm Sep 1, 2017 1:45pm
Quoting mlawson71
{quote} My apologies, I did not express myself properly. I am no longer a total newbie (I am by no means a pro, but I'd like to think I am a bit more experienced and educated than I was as a total newbie) - I haven't been one for a few years. What I was trying to say was that back when I was a total newbie I gave Ichimoku a try and it didn't work out, so I moved onto other things. These days I mostly use Bollinger Bands as an indicator. Once again, I'm sorry I didn't express myself better.
I should be apologizing for misinterpreting your previous post. Trading is a tough business, so I am glad to hear that you have gained the necessary experience. Bollinger Bands looks like an interesting indicator, however, I never had the time to actually study it. If I may ask, what is your exit strategy? Do most Bollinger Band traders exit from a trade when price action goes below the standard deviation line? In my opinion it could be a good idea to combine Bollinger Bands with fractals as it can increase your chance to get on the right side of the market when price breaks out especially when those bands become tight. USOil on the 1 hour chart showed a good example of this technique on the 28/8/2017.
  • #69
  • Sep 2, 2017 8:33am Sep 2, 2017 8:33am
Quoting ThugLife
{quote} I should be apologizing for misinterpreting your previous post. Trading is a tough business, so I am glad to hear that you have gained the necessary experience. Bollinger Bands looks like an interesting indicator, however, I never had the time to actually study it. If I may ask, what is your exit strategy? Do most Bollinger Band traders exit from a trade when price action goes below the standard deviation line? In my opinion it could be a good idea to combine Bollinger Bands with fractals as it can increase your chance to get on the right...
I combine the indicator with candlestick analysis. The indicator bands show pretty good support and resistance levels, especially when the currency pair is entering a period of sideways consolidation, and various candlestick formations can give a good signal when exactly to close a trade because the pair's about to reverse from the support or resistance.
  • #70
  • Sep 4, 2017 3:02am Sep 4, 2017 3:02am
Quoting mlawson71
{quote} I combine the indicator with candlestick analysis. The indicator bands show pretty good support and resistance levels, especially when the currency pair is entering a period of sideways consolidation, and various candlestick formations can give a good signal when exactly to close a trade because the pair's about to reverse from the support or resistance.
Thank you, for sharing your knowledge.
  • #71
  • Sep 5, 2017 10:26am Sep 5, 2017 10:26am
Quoting HarryBox
If you take profit many times for long-run then it is good
Absolutely right as the main motive is to earn money so whatever the amount is earned is good no matter if it is small but it should be consistent.
  • #72
  • Sep 5, 2017 7:07pm Sep 5, 2017 7:07pm
The moment we figure out the right balance between taking profit and getting out of trade is the moment we will become an expert. So, till this is not possible, it’s not possible for us to reach towards what we desire, it’s something very hard but very much doable. We just need to be discipline and kill the greedy mindset; it will help us a lot and help us with many things and will keep it all good!
  • #73
  • Sep 23, 2017 7:26am Sep 23, 2017 7:26am
Quoting jollypk
{quote} Absolutely right as the main motive is to earn money so whatever the amount is earned is good no matter if it is small but it should be consistent.
Yes , no way to deny, to bring profit sometimes can be possible by trading at random but not for all time. that’s why consistence profit is a big challenge for us and practically we fail to keep up continue.
  • #74
  • Sep 23, 2017 9:00am Sep 23, 2017 9:00am
Learning not to take profits too early is a matter of several things - having a proper, well-tested on a demo account trading plan, trust in your trading plan and self-discipline. If you have those, you won't close your positions too early.
  • #75
  • Sep 24, 2017 8:55pm Sep 24, 2017 8:55pm
A trading plan is good, but if there is already a plan in place and you still struggle, it is most likely that you "suffer" from Hyperbolic discounting: https://en.wikipedia.org/wiki/Hyperbolic_discounting
Most people do, including myself. It's perfectly normal to want to take profits too early. What's most important is that you understand why, and not act to those emotions. However, you will always feel uncomfortable when dealing with uncertainty and risk..
  • #76
  • Sep 25, 2017 7:44am Sep 25, 2017 7:44am
I had never heard of that term. This just shows how much I still have to learn about trading and the psychology of trading.
And you make a great point - risk taking always makes traders uncomfortable - to put it mildly, in some cases - but it's important to overcome that discomfort in order to trade properly.
  • #77
  • Sep 25, 2017 8:00pm Sep 25, 2017 8:00pm
Quoting mlawson71
I had never heard of that term. This just shows how much I still have to learn about trading and the psychology of trading. And you make a great point - risk taking always makes traders uncomfortable - to put it mildly, in some cases - but it's important to overcome that discomfort in order to trade properly.
Or perhaps admit that there are cognitive biases that we will continue to have, but we wont act them out.

One other way is to ask yourself.. "how would I feel in the future, if I take my profits too early now..?" Most likely you would feel bad in the future, because you didn't follow your plan and the edge you have built in the strategy.

My strategy is based on large risk:reward (1:4) ratios, if I take my profits too early, say 1:1RR, the edge is gone. and I think a lot of strategies/edges are built around the take profits and exits. Mastering the profits and exits is key in my opinion.
  • #78
  • Sep 26, 2017 4:56am Sep 26, 2017 4:56am
It’s very important calculation! In my trading, I use all kind of trading styles unless hedging! I do hold my few traders couples of week; really I don’t want to close my trades too early! Closing trades positions too early is another problem. Because good opportunities are not available with such a number.
  • #79
  • Sep 26, 2017 5:19am Sep 26, 2017 5:19am
I think a long term plan is very important to stick with your plan and when to exit


But at the same time profit is profit and sometimes closing a position early is good for your mental health
  • #80
  • Sep 27, 2017 7:35am Sep 27, 2017 7:35am
Quoting HarryBox
If you take profit many times for long-run then it is good
Sometimes it’s good and sometimes it’s not! When can’t wait for a breakout when the market is very near on major support and resistance level.
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