Closing positions to early.

We all know your are supposed to cut your losing trades and let your winners run... let the trend be your frieynd.

i trade the eurusd 1 and 5min charts. mostly breakouts of chartpatterns, S&R, and trendlines.

i find i really have a problem with closing my positions to early, and with letting my losing positions stay open to long.

for example.

today i made 4 trades so far, my first was -18 pips, my second was +7 my third was +4 and my second was +4, so over all iam still down -3 pips.

every single one of my profitable trades today were closed early, and if i had let them to to their full potential each one of them would have been more then my losing trade, however, i find that when i get in profit i start to get nervous and when i see a tiny pullback and it heads towards breakeven i endup closing it and then regretting it 10 seconds later.


usually i will set a stoploss and sometimes a TP depending on the trade, and the circumstances, but i often have trouble sticking to my TP

any tactics, techniques, literature, ideas, videos, websites, etc. on this subject?

Maybe you could open two position. Close one when you reach your target and another one hold to its potential, let it runs. Make sure the second one you change the stoploss to break even so you wont end up losing.

thank you for ur advise

I think it might be an idea to trade higher time frames

I dont think that will help the OP with his specific problem, although It may be a good idea regardless of the specific issue he is trying to resolve.

All I can say Is to look over past charts, make sure entry decisions are based on solid conditions you can easily identify before the fact. And then based on past outcomes decide what to expect from your trades, have a game-plan for the different possible outcomes. You need to use a larger TF for overall Trend and Important S&R ideally, why not try the 5min for entry and 1hour for overall trend?

Just some idea's.

Leon

I had this problem for a very long time and i can say that if you set a Reward/Risk higher than 1.5:1 you may win money, but you have to think where your stop will be and than look if your TP is in a safe zone too, then you enter the trade and Don't Close it before it trigger TP or SL. This is the Holy Grail in trading (for me at least). If you stopped too many times, switch for a higher TF.

Few method that I've learnt :-

1) Only close trade when candle close
2) Set your TP SL, and shut off your mt4
3) Scale out your winning position (You will very glad to see 1/3 of your position hit homerun)
4) Confidence

IMHO the cause is the fear of losing and fear of being wrong. These can only be overcome by vigorous self discipline. It may be as simple as trading at a level that the loss of the money will not make any difference. Trade a penny a PIP - let it go into a loss on purpose - how do you feel about it? Is it OK cause you tell yourself its OK. Well if so then maybe your issue is your need to be right.

I personally hate to lose and I hate being wrong. It is a constant battle with myself, but I know how I am, and thus I know what to look for and I know the symptoms - its hard to 'hold' when you just know price is gonna retrace, but my rules say - "no exit until i get a signal" - and so I stay the course. Yeah, sometimes I should have listened to that little voice, but overwhelmingly I make a better profit by waiting.

If your like me you'll never get used to losing, but it becomes acceptable when you know that you won the discipline part of the batle. Losing money is the easy part, its the 'kicking yourself' afterwards thats tough, don't do that - just acknowledge what happened and move on. It's a tough road we travel in this search of self discipline. Good traveling.

You trade based on fear. Its almost like you're trading blind. You're entering/exiting trades without a plan and no insight into the market let alone the trade.

Just a tip. I know lots of traders perfer to scalp lower time frames (i.e 1min, 5min, 15min, ect.), instead of looking for direction and entry on a 1m/5m chart ... throw up a 4Hour chart (or higher) with an RSI 14 or SMA 13. Before you even think about looking at a 1m/5m chart, take a peek at the 4Hour chart first. If its difficult to find the "overall trend" on the 4Hour chart, look at the direction of the RSI 14 or SMA 13. If they point up then use your 1m/5m chart and pick an entry in the direction of the 4hour charts trend. And if the 4Hour chart candle starts to bend, then close trade. I promise ... you will not loose very often. You just have to hold on to those trade a little longer.

Just remember,
4Hour chart = Direction/Outlook
1m/5m chart = entries (exits, also, if you know what to look for)

hey guys, thank you all for each of your responses, i will be trying each idea posted.

i have known for a while now that i trade with the fear of being wrong, it is very common for me that when i have a position that goes into the negative i will say:"i will close this position as soon as it goes to breakeven" because atleast that way i wasn't wrong because i didnt lose.

thank you all, and if anyone else has anything else to add feel free.

regards,
alex

dont know if this has been said

but you are fearing your wins and hoping when you lose, when you turn psychology to the opposite you will be on track

IMO, if you're worried about 5 pips, 10 pips, you're doing it wrong.

Move up to the higher timeframes where you're dealing with HUNDREDS of pips and trading will be much easier. Not only is the pace different, but the indicators/signals are more reliable on longer timeframes.

Don't trade with scared money.

If the Boss told you to build a wall 10' High, would you stop at 6'High, thinking 'That's High Enough'?

Hopefully, when you Trade, you have some perception of Potential Reward @ the time you Open the Trade {how high Should this wall be?} . Some thought should also be given to How you are going to Disect the Trade for Exits. {Plural}

Believe me: The First thing a Good Boss learned was how to Boss himself.
"It's gotta be done. I gotta make it happen. Some of the guys will be pissed but... It's gotta be done."

Cut his arm off & haul him outta there. That way he, at least, get's to see his kids again.

Some decisions are not easy & hopefully we make the right ones but, If You Trade,

You're The Boss.

Question is... Are You ready to become your own boss or do you want the SAW Job?

Cut Throat it is. I have Mine & I also want Yours. Stand Ready.

Apologies for spilling some guts on the floor but there is not one succesfull Trader who has not suffered the Losses that set him out for revenge.

Never Strike a Blow in Anger. Always Strike in Cold Blood.

The Dark Side of BMc.

The same thing used to happen when I started demo trading ( I still am demo trading, until I'm ready both system-wise and psycology-wise to go live). I used to open a trade in the 5 min chart or 1 min chart based on RSI, MACD and maybe another indicator and then I'd be anxious about what would happen with the price (sometimes I even spoke to the computer screen saying "go up...go up" or "go down....go down") and many trades resulted in losses or small profits and were very stressful.

Now what I do is that I'm currently developing my own system, based on other of course, which right now I am pretty confident in. Every time I enter a trade I set a stop loss order and a TP order and then I try to stay away from the market. (I say I try because sometimes i go back and check about 20 or 30 minutes later).

That has helped me because if I had been watching the market from the moment I opened my position, then maybe I would have closed it out early with a loss when eventually they hit my TP.

So I've been able to overcome that using a system I'm confident in and staying away once I open a trade.