How do you let profit run... Position management | Forex Factory

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How do you let profit run... Position management

  • #1
  • First Post: Dec 1, 2011 12:44pm Dec 1, 2011 12:44pm
Hello

They say: Cut short your losses and let your profit run

Easy to cut short the losses with a stop loss installed. But how do you keep your profit run ?

My actual rule said: Move your initial stop loss to brake even ( entry price + 3 pip for a long after the first bar that his low ended over the target price. OK, I got a small profit and my trade won't be negative, but often, I'm put out of the trade early, just to see the price going in what was my direction.

Also, how do you determine that the trend is over in it is time to get out.

I understand that there is an infinite way to manage a trade. No right and wrong way here, just how do you manage your position What I'm seeking is your point of view.

MT.
  • #2
  • Dec 2, 2011 12:39am Dec 2, 2011 12:39am
Quoting arjfca
Hello

They say: Cut short your losses and let your profit run

Easy to cut short the losses with a stop loss installed. But how do you keep your profit run ?

My actual rule said: Move your initial stop loss to brake even ( entry price + 3 pip for a long after the first bar that his low ended over the target price. OK, I got a small profit and my trade won't be negative, but often, I'm put out of the trade early, just to see the price going in what was my direction.

Also, how do you determine that the trend is over in it is time to...
find a way to measure volatility, (first step in figuring out if its a direction change or a normal price variation within a mathematical possibility)
AVT INVENIAM VIAM AVT FACIAM
  • #3
  • Dec 2, 2011 2:29am Dec 2, 2011 2:29am
Quoting the redlion
find a way to measure volatility, (first step in figuring out if its a direction change or a normal price variation within a mathematical possibility)
Thanks Redlion

I'm visual, could you post a chart with explanation

MT
  • #4
  • Dec 2, 2011 3:12am Dec 2, 2011 3:12am
Quoting arjfca
Hello

They say: Cut short your losses and let your profit run

Easy to cut short the losses with a stop loss installed. But how do you keep your profit run ?

My actual rule said: Move your initial stop loss to brake even ( entry price + 3 pip for a long after the first bar that his low ended over the target price. OK, I got a small profit and my trade won't be negative, but often, I'm put out of the trade early, just to see the price going in what was my direction.

Also, how do you determine that the trend is over in it is time to...
Ok, my point of view is don't believe everything you read. There is nothing wrong with getting out before the trend is over. Also there is nothing wrong with letting loses run a little if you know what you are doing. Regarding break even stops, they are generally a bad idea. Exits should be based on the market, not your entry price. If you have made a good long entry for example, then your entry level is likely to continue to act as support, so a break even stop will get you out of the trade right when you should be getting in or re-loading after partial profits were taken.
  • #5
  • Dec 2, 2011 3:46am Dec 2, 2011 3:46am
  •  MPP
  • Joined Jun 2007 | Status: Be yourself, everyone else is taken | 2,734 Posts
complicated - very complicated

cut your loses short and let your profits run - ok for a general rule.... but what exactly does it mean

well to me nothing really, the system design should decide the method by which you open or close a trade - stops, trailing stops, Taking profits, swings from one trade into the next are all means of controlling a trade - - so long as they follow your rules

take my system

set tp's
no SL
if tp is not hit and direction changes flip the trade

crazy you might think - but 3 years of forward testing actual trades has proven to me that a fix tp for extreme peaks and flipping the trades is the most profitable

no SL - no fixed SL, but a change in market direction is my SL control - so i control my loses by watching the market - not a set number of pips

I'd say Redlion is onto a winner (off the subjet - The Red LIon is one of the most popular UK pub names - i though you might have been english)

big white line is a 15000pip (yes 15k)drop in the market - massive move, but how many trades would kick you in the butt for fixed stops, what if your stop was controlled and your tp allowed you to take a good chunk of each of those swings?

study your system - create the rules, analyse them and adjust to suit - rinse and repeat - it never ends - because the markets always changing

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  • #6
  • Dec 2, 2011 3:47am Dec 2, 2011 3:47am
  •  MPP
  • Joined Jun 2007 | Status: Be yourself, everyone else is taken | 2,734 Posts
Quoting Agro
Ok, my point of view is don't believe everything you read. There is nothing wrong with getting out before the trend is over. Also there is nothing wrong with letting loses run a little if you know what you are doing. Regarding break even stops, they are generally a bad idea. Exits should be based on the market, not your entry price. If you have made a good long entry for example, then your entry level is likely to continue to act as support, so a break even stop will get you out of the trade right when you should be getting in or re-loading after...
I agree
  • #7
  • Last Post: Dec 2, 2011 3:41pm Dec 2, 2011 3:41pm
Quoting Agro
then your entry level is likely to continue to act as support, so a break even stop will get you out of the trade right when you should be getting in or re-loading after partial profits were taken.
Key words : partial profits were taken". Let a little run... and it really depends on the type of market your trading.
No right/wrong answers here. Just views on whats works individually for every trader.
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