Taking Profits too early? | Forex Factory

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Taking Profits too early?

  • #1
  • First Post: Jun 6, 2013 10:56am Jun 6, 2013 10:56am
Hi All,

I need some help!

I have an issue where I can't help it but take profits way to early!

Over the past few days this has actually cost me at least £1500 maybe more!

I really need to learn to overcome this. Has anyone been there and come out the other side?

If you have please could you advise me on how best to overcome this...

Emporia
  • #2
  • Jun 6, 2013 11:22am Jun 6, 2013 11:22am
What is happening is that your brain tries really hard to avoid being in uncertain situation which is your open trade.To avoid the suffering you exit the trade very quickly which is giving you relief short-term but long-term your sufferings become even greater.

I'd suggest taking 3 steps to avoid it

1)Read Trading In The Zone by Mark Douglas
2)Develop highly mechanical way of eliminating the risk(I keep it really simple - moving my stop bar by bar).
3)Define clear exit(I also keep it really simple by trying to reach 1:2 risk/reward ratio)

What really helped me is that I'm keeping record of all the trades and analyze them - with confidence that you really have an edge comes ability to stay in the trade as long as it's needed according to your rules.
  • #3
  • Jun 6, 2013 1:42pm Jun 6, 2013 1:42pm
Thanks for the input that makes a lot of sense. I have read Trading In The Zone a few times and have actually just got his 2 day seminar recording so will watch that.

I am going to have to think up an appropriate exit strategy...
  • #4
  • Jun 6, 2013 9:54pm Jun 6, 2013 9:54pm
If you think that you are taking profits early the do as already suggested. Keep a record of your trades.
Put them in a spreadsheet
Include in your spreadsheet how much the maximum would have been if you had stayed on the trade
Try to be honest about if / when you would have moved your SL to BE
You should then be able to compare how your results MAY have turned out if you hadn't exited where you did. You have to be realistic about the max, because it is extremely unlikely that you would have exited exactly at the max.

The thing is that without complete records, we always remember or notice the trades that we exited with 30 pips and then went on to make an extra could of/ would of/ should of 70 pips.
We don't tend to notice the trades that if we hadn't exited where we did and it would have reversed and hit our SL

By far the best way to check is in real time.
Instead of closing your trade "too early", close half the position and let the other half run.
That way you will have a record in your trading account. You will see which half averages out to more profit over a period.
Please Do Not PM Me With Coding Enquiries
  • #5
  • Jun 7, 2013 6:01am Jun 7, 2013 6:01am
Quoting Emporia
Hi All, I need some help! I have an issue where I can't help it but take profits way to early! Over the past few days this has actually cost me at least £1500 maybe more! I really need to learn to overcome this. Has anyone been there and come out the other side? If you have please could you advise me on how best to overcome this... Emporia

This is a common problem for most of the traders. I also had this earlier & this is mostly related to trading psychology. I recommend you to develop a trading plan and follow the rules as per your trading plan. Hope this make sense.
  • #6
  • Jun 7, 2013 6:37am Jun 7, 2013 6:37am
I have this habit of closing my winning trades too early and keeping the losing ones running until they hit stop loss. I don't know what is the main problem with me for doing this.
  • #7
  • Jun 7, 2013 7:25am Jun 7, 2013 7:25am
Quoting hedging
I have this habit of closing my winning trades too early and keeping the losing ones running until they hit stop loss. I don't know what is the main problem with me for doing this.
When you see a trade showing some profit, you will be afraid that the market will take it back, so you close out to be sure of making a profit.
When a trade goes into loss you will be afraid that if you close early and limit the loss that the market will reverse and go on to your TP without you on board
Please Do Not PM Me With Coding Enquiries
  • #8
  • Jun 7, 2013 11:45pm Jun 7, 2013 11:45pm
I would recommend keeping your take profit as the only way to exit a trade profitably. The only time I would get out of a trade too soon is if the market is showing evidence of a reversal.
  • #9
  • Jun 8, 2013 3:48am Jun 8, 2013 3:48am
Managing the trade is so much more important than the system/entry. No system I saw in FF includes a proper trade management rules set. This is certainly the most advanced topic and the least discussed one. Can someone explain me why this was moved to the Rookie section?! Beats me.
No greed. No fear. Just maths.
  • #10
  • Jun 8, 2013 6:46am Jun 8, 2013 6:46am
it's a perpetual problem with many traders. They take profits early but let losers run.

one thing to do is ask yourself the question "If I was not in this trade now, would I enter in the opposite direction?" try to take the emotional attachment away when you ask the question. if the answer is a resounding no then you are most likely good to hold.
https://linktr.ee/Soultrader
  • #11
  • Jun 8, 2013 9:08am Jun 8, 2013 9:08am
I guess we cant stand profits making a hole in our pockets....this is definitely the hardest skill to master.
wo-yoy! wo-yoy! wo-yoy! wo-yoi! wo-yoy-yoy-yoy!
  • #12
  • Jun 9, 2013 12:57am Jun 9, 2013 12:57am
Quoting Emporia
Hi All, I need some help! I have an issue where I can't help it but take profits way to early! Over the past few days this has actually cost me at least £1500 maybe more! I really need to learn to overcome this. Has anyone been there and come out the other side? If you have please could you advise me on how best to overcome this... Emporia
Have you tried to use take profits and don't watch your trade constantly? Or if it is allowed on your platform trailing stops?
  • #13
  • Jun 25, 2013 6:29am Jun 25, 2013 6:29am
Set the stop loss and take profit and then if you are still not feeling secure set up the trailing stop why simply worry and take small profits when the potential is even more.
  • #14
  • Jul 17, 2013 1:50pm Jul 17, 2013 1:50pm
Either set a target and forget it or trail you stops as the market progresses, have rules in place to overcome this issue
  • #15
  • Jul 17, 2013 9:38pm Jul 17, 2013 9:38pm
Come on, this is not a problem..just use a TP and monitor your positions..
  • #16
  • Jul 20, 2013 8:50am Jul 20, 2013 8:50am
I had this problem but then I controlled my habit by using multiple entries and closing some with little difference in between them. And letting the final ones keep running for long.
  • #17
  • Jul 20, 2013 9:08am Jul 20, 2013 9:08am
This happened to me yesterday, i had a buy EUR/JPY @131.40 and took profit @131.90 but the market shot above 132.2X
  • #18
  • Jul 20, 2013 12:36pm Jul 20, 2013 12:36pm
Quoting Emporia
Hi All, I need some help! I have an issue where I can't help it but take profits way to early! Over the past few days this has actually cost me at least £1500 maybe more! I really need to learn to overcome this. Has anyone been there and come out the other side? If you have please could you advise me on how best to overcome this... Emporia

Hi
Care to mention what you consider early?
To a scalper 20-50pips is great and often they call it a day
To a day trader 50-100 pips is good
To a swing trader anything over 100pips is excellent.I swing trade I take my profits not at specific number but what PA is doing.If PA hits severe resistance like EC at 36 then holding those shorts longer hoping further down move is pointless.If momentum is down and supported by fundamentals then let your trades run but then again always look at PA at every S/R
Anyway please be more specific

By the way nothing cost you if you were not in the trade.Its wrong way to look at trading.
In trading, you have to be defensive and aggressive at the same time
  • #19
  • Jul 20, 2013 12:42pm Jul 20, 2013 12:42pm
Quoting Greeneyez
Set the stop loss and take profit and then if you are still not feeling secure set up the trailing stop why simply worry and take small profits when the potential is even more.

I find trailing stops not very effective.You can be stopped out on spike then trend resuming same direction without you.
I prefer TP set with discretion of watching what PA is doing at critical junctions S/R Round numbers 200MA etc
In trading, you have to be defensive and aggressive at the same time
  • #20
  • Jul 22, 2013 5:36am Jul 22, 2013 5:36am
The problem that you've mentioned is omnipresent when people feel disappointed even after making profits. In order to avoid this strategy one should adopt gradual exit strategy (if possible), it says if you are holding multiple positions or it is possible to liquidate part of your single position and hold the rest of it, one should exit the part at his/her determined target and trail the stop-loss, if the pair moves considerably into favorable direction one should keep on repeating the action util the reversal takes place. In this way you would get the benefit of favorable movement as well as feel satisfied.
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