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Selling Half of Position

  • #1
  • First Post: Jun 23, 2011 12:45am Jun 23, 2011 12:45am
Hello all,

I was wondering if any of you guys have the habit of selling half of your position when you are racking up the green pips?

If so, would you care to share at what point you sell half your position?

For me, personally, I sell half my position when the amount I risked is covered.

For example, if I am shorting EUR/USD at 1.4300, and put my SL at 1.4330, I will sell HALF my position when price reaches 1.4270. Is this effective?

I would like to hear your strategies on selling half your position so I have more ideas as to how I should do this.

Thanks,
Brandon
  • #2
  • Jun 23, 2011 3:51am Jun 23, 2011 3:51am
The problem with partial closing of the winning positions is that it goes against the philosophy of "letting your profit grow". That's the main reason I don't do it - I better move my stop up to break-even point if I see some nice profit on a position.
  • #3
  • Jun 23, 2011 8:59am Jun 23, 2011 8:59am
Quoting Brandon
Hello all,

I was wondering if any of you guys have the habit of selling half of your position when you are racking up the green pips?

If so, would you care to share at what point you sell half your position?

For me, personally, I sell half my position when the amount I risked is covered.

For example, if I am shorting EUR/USD at 1.4300, and put my SL at 1.4330, I will sell HALF my position when price reaches 1.4270. Is this effective?

I would like to hear your strategies on selling half your position so I have more ideas as to how I should...

Did you try trialling stops?
  • #4
  • Jun 23, 2011 9:14am Jun 23, 2011 9:14am
Often done in Pakistan and India.
But only in RED pips

They sell of their wife
  • #5
  • Jun 23, 2011 9:47am Jun 23, 2011 9:47am
Quoting Brandon
Hello all,

I was wondering if any of you guys have the habit of selling half of your position when you are racking up the green pips?

If so, would you care to share at what point you sell half your position?

For me, personally, I sell half my position when the amount I risked is covered.

For example, if I am shorting EUR/USD at 1.4300, and put my SL at 1.4330, I will sell HALF my position when price reaches 1.4270. Is this effective?

I would like to hear your strategies on selling half your position so I have more ideas as to how...
if there is a huge quick move in my favored direction I sell half and after the retrace I put it back in essentially scalping that area

my experience is basically if there is a huge unusually fast movement in the trend direction you can expect it to be faded / not many people will want to get in the trends direction at that unattractive level so you can sell half and get in when the next wave of traders comes in

and if your wrong and it rallies more you still collect on half your position.. but more often then not it will retrace.. and it will definitively retrace at some point in time to get back in your other half
  • #6
  • Jun 23, 2011 9:58am Jun 23, 2011 9:58am
Quoting newyear498
if there is a huge quick move in my favored direction I sell half and after the retrace I put it back in essentially scalping that area

my experience is basically if there is a huge unusually fast movement in the trend direction you can expect it to be faded / not many people will want to get in the trends direction at that unattractive level so you can sell half and get in when the next wave of traders comes in

and if your wrong and it rallies more you still collect on half your position.. but more often then not it will retrace.. and it will...
or, you could sell half at 0.5R, move the sl to -0.5R and be now guaranteed breakeven at worst. if you then load a new position at the same start position because it retraces then you can continue to repeat the process of setting-up no-loss positions... or creep the SL's less than -0.5R for a guaranteed small profit.

now if the market moves in your direction you have potentially built a nicely large overall position for a bigger payoff than waiting for just the one original position to breakout... or it doesn't and you don't.
Congratulations ScalaFX for coming out of the closet!
  • #7
  • Jun 23, 2011 10:09am Jun 23, 2011 10:09am
Quoting nubcake
or, you could sell half at 0.5R, move the sl to -0.5R and be now guaranteed breakeven at worst. if you then load a new position at the same start position because it retraces then you can continue to repeat the process of setting-up no-loss positions... or creep the SL's less than -0.5R for a guaranteed small profit.

now if the market moves in your direction you have potentially built a nicely large overall position for a bigger payoff than waiting for just the one original position to breakout... or it doesn't and you don't.
0.5R = risk? example with pips please.. I think I get you tho..

I've done similar before... you know whats a mind fuck.. the brokers with there "you have to sell first position open" the way it manipulates you unrealized p/l makes you feel like your always losing.. you really need to look through there BS..

you sell two lots at separate times.. if it retraces to lot one your unrealized P/L says your losing your position.. but are you really? your winning.. its took me for a few mind trips when I was first trading..
  • #8
  • Jun 23, 2011 10:29am Jun 23, 2011 10:29am
yes i mean risk. if you risk 10 pips, close half at +5 pips and move the SL to -5 pips from the position open you are on a free ride. if the market hits your stoploss you result in breakeven. if you keep recycling this idea as the market moves up and down then you could potentially build a position that has at most 10 pips at risk on the latest position but x number of open positions that are guaranteed to lose nothing. if the market shoots positive in your favour then you now have n number of open positions that are riding further profit instead of just 1 position that had half closed at 5 pips already.

if you don't close any part of an open position then you can only breakeven if you bring the stoploss to the price of the position open price. closing some fraction of the position allows you to have the stoploss further away in what was originally negative profit territory. this gives some room for the market to gyrate within back and forth while having no risk, but you have nerfed your profit potential because a winning position is only half as strong as it moves into profit. all i'm saying is if you are scalping an area that seems to be ranging then you could try building a bunch of risk free positions that will reward in a greater payoff over less distance than the 1st opened position ever could have.

it's just an idea that will screw the balance of risk versus reward versus win rate. just another magic trick.

plus, i didn't realize you were dealing with the stupid fifo rules and whatnot.
Congratulations ScalaFX for coming out of the closet!
  • #9
  • Jun 23, 2011 10:33am Jun 23, 2011 10:33am
sell a third of position at 2:1, leave stop at original place =breakeven if stopped out.
  • #10
  • Jun 23, 2011 10:45am Jun 23, 2011 10:45am
Quoting nubcake
yes i mean risk. if you risk 10 pips, close half at +5 pips and move the SL to -5 pips from the position open you are on a free ride. if the market hits your stoploss you result in breakeven. if you keep recycling this idea as the market moves up and down then you could potentially build a position that has at most 10 pips at risk on the latest position but x number of open positions that are guaranteed to lose nothing. if the market shoots positive in your favour then you now have n number of open positions that are riding further profit instead...
no this works.. and I actually know how to manipulate around those fifo rules it just makes things a little more tricky

this is a good point tho because trading is all about reducing risk.. thats the successful trick to surviving and prospering.. can't get far in life if your always increasing risk by driving on the wrong side of the highway aye!?!
  • #11
  • Jun 23, 2011 11:13am Jun 23, 2011 11:13am
the brokers with there "you have to sell first position open" the way it manipulates you unrealized p/l makes you feel like your always losing.. you really need to look through there BS..

you sell two lots at separate times.. if it retraces to lot one your unrealized P/L says your losing your position.. but are you really? your winning.. its took me for a few mind trips when I was first trading.. [/quote]


I think the trick is to not buy the same sized lots. You only have to close the first position open if they are the same size lots. So off-set your new positions by a micro-pip.
  • #12
  • Jun 23, 2011 12:52pm Jun 23, 2011 12:52pm
Quoting Brandon
Hello all,

I was wondering if any of you guys have the habit of selling half of your position when you are racking up the green pips?

If so, would you care to share at what point you sell half your position?

For me, personally, I sell half my position when the amount I risked is covered.

For example, if I am shorting EUR/USD at 1.4300, and put my SL at 1.4330, I will sell HALF my position when price reaches 1.4270. Is this effective?

I would like to hear your strategies on selling half your position so I have more ideas as to how I should...
It is not a habit but I do such things. TP-1, TP-2 etc. My trading plan sometimes has several "take profit" points. This is when I divide my position to couple parts. When floating about 100 (R:R is important before entering) and my first TP point is reached I bank half or one third of the position. Had EUR/USD trade last week and the last part of the trade was only 1/10 of the position I have started with. Did the same thing with silver today. Now I have 2.1% in the bank. My SL is at +1. I'm thinking that it will still go down but it is Fx - nothing is 100% here. But I have profits from the trade and now playing with 0 risk.
Twitter: MrC_Forex ; Facebook: /pages/MrC-Forex/197693770247397
  • #13
  • Jun 23, 2011 4:05pm Jun 23, 2011 4:05pm
Quoting highway
Often done in Pakistan and India.
But only in RED pips

They sell of their wife
But not half off it, lol, i guess?
  • #14
  • Last Post: Jun 26, 2011 2:28am Jun 26, 2011 2:28am
Quoting Brandon
For example, if I am shorting EUR/USD at 1.4300, and put my SL at 1.4330, I will sell HALF my position when price reaches 1.4270. Is this effective?
Smart man. Its a very effective strategy. Continue to keep selling the lower it goes though and move SL's to keep risk limited throughout.
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