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Taking Profits too early?

  • #21
  • Jul 25, 2013 12:51am Jul 25, 2013 12:51am
I am usually closing 50% of the trade when I see price action topping and move my sl to BE. Also it`s important to keep in mind that you can never catch the whole move.
  • #22
  • Jul 25, 2013 6:22am Jul 25, 2013 6:22am
Quoting Scalptastic
I am usually closing 50% of the trade when I see price action topping and move my sl to BE. Also it`s important to keep in mind that you can never catch the whole move.
...when I try to close my 0.01 lots it's hard for me to close 1/2 of it )
  • #23
  • Jul 25, 2013 6:47am Jul 25, 2013 6:47am
A good way to overcome this is to convince yourself of your decision to make a particular trade, your reasoning should be 'I believe the market will move from the price I enter and will hit my profit target before it hits my stop loss order.', then leave it, walk away and don't look at the charts for a few hours.
  • #24
  • Jul 25, 2013 6:07pm Jul 25, 2013 6:07pm
I agree that there are times when you feel like you have got out early..it happens to all of us. Apart from the reward to risk ratio, have a well defined exit strategy, adjust your SL if you think it is required..and log all your trades.
  • #25
  • Jul 26, 2013 3:56am Jul 26, 2013 3:56am
Quoting Forexnuts
I agree that there are times when you feel like you have got out early..it happens to all of us. Apart from the reward to risk ratio, have a well defined exit strategy, adjust your SL if you think it is required..and log all your trades.
What is the point of logging your trades? You have history, isn't it enough?
  • #26
  • Jul 27, 2013 3:49am Jul 27, 2013 3:49am
Taking profits at the earliest stage leaves the trader dissatisfied with the trade they have done and this usually results in overtrading which should be avoided.
  • #27
  • Jul 31, 2013 2:04pm Jul 31, 2013 2:04pm
Quoting DitterPD
{quote} What is the point of logging your trades? You have history, isn't it enough?
No, not really. I do most of my analysis offline, during weekends and usually prefer to work with my journal but yes, you can work with history, work back to what orders you'd placed and get other info..
But prefer the journal..
  • #28
  • Aug 1, 2013 6:22am Aug 1, 2013 6:22am
Quoting Forexnuts
{quote} No, not really. I do most of my analysis offline, during weekends and usually prefer to work with my journal but yes, you can work with history, work back to what orders you'd placed and get other info.. But prefer the journal..
"Going old-school"
  • #29
  • Aug 1, 2013 4:20pm Aug 1, 2013 4:20pm
Yeah, it is old school, all right but FWIW, I'm not that old, just prefer to use old school strategies and keeping the journal helps me to focus better - not sure if that's the same with others who do it the old way but sure works wonders for me..
  • #30
  • Aug 2, 2013 8:16am Aug 2, 2013 8:16am
Change the mindset - think of taking profit early equivalent of hanging on to a loser .

If the position is profitable , step away from desk/screen and go for a quick stroll.
  • #31
  • Aug 2, 2013 2:39pm Aug 2, 2013 2:39pm
Believe me, as traders we have all done that, a while back. As you trade, you'll soon see what you think is a trend and opt to wait it out in order to get more pips but soon, the retracement kicks in and you get to watch all the pips go poof.
It all comes down to discipline, set a target (pips), and once that is reached, close the order. Sounds easy, right? But it is anything but that..
  • #32
  • Aug 2, 2013 4:47pm Aug 2, 2013 4:47pm
A well defined system should account for the entry AND the exit. You should be backtesting your strategy as far as possible (with excel, if manual trader) to determine the rules of your exit. Often I find that the reversal of the entry logic makes the best exit, rather than some predefined pip target.

When you have the rules and plan in place, and stubbornly follow them, you will be able to hang on to your profit longer.
  • #33
  • Aug 2, 2013 10:30pm Aug 2, 2013 10:30pm
Less experience and having less knowledge of one's trading strategy is the main cause of this act. If we know how much our strategy can produce under certain conditions, then we can aim for that exact pip value.
  • #34
  • Aug 3, 2013 1:50am Aug 3, 2013 1:50am
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
It's an illusion. look closer. You think you are closing too early, but in fact you are not. You are not considering all the trades that you were right about closing too early and focussing on the trades that you should have kept longer.
... and the same for the losses.
It's all "should've, would've, could've".
  • #35
  • Aug 3, 2013 6:21am Aug 3, 2013 6:21am
If i think the trade will go further i usual use a trailing stop loss, if your system has set stop loss and take profit then its easier to manage the trades.
  • #36
  • Aug 3, 2013 7:01am Aug 3, 2013 7:01am
I've noticed this happening to myself as well. It seems that I cannot accept minor losses and tend to leave trades open until a stop loss occurs, but I take profits pretty early. Is it because it's psychological? and is there a way to overcome this?
  • #37
  • Aug 3, 2013 11:34pm Aug 3, 2013 11:34pm
Well my friend. I suggest you wonderful reading below

extractions from the article

"Have you ever asked yourself why you take profits too early, but let your losses run to the full stop? Have you ever wondered why you feel the tension, emotion and desire to close your winning trades too early before hitting your take profit level – even though the trade is already in profit and moving favorably for you? "


There is an underlying reason for this, which actually goes beyond your emotions, trading history or experience. It is always present, yet is like your shadow – always close following you, but not something you can pin down. Every time you are in a winning trade, you seem to experience this want to close the trade early


Read Full Article Here -Why we close trades Early
  • #38
  • Aug 4, 2013 3:26am Aug 4, 2013 3:26am
Quoting GDR3k
A good way to overcome this is to convince yourself of your decision to make a particular trade, your reasoning should be 'I believe the market will move from the price I enter and will hit my profit target before it hits my stop loss order.', then leave it, walk away and don't look at the charts for a few hours.
Great advice!I usually leave my computer after take a trade!After a long time,I will see what happen to my trade!So don't let market control and attract you,you will get better result!
  • #39
  • Aug 4, 2013 6:40am Aug 4, 2013 6:40am
I too have a habit of closing the trade too early.May be i fear of losing since I am new in to the trade.Gradually,I am learning and hopefully will be fine in a month or so.
  • #40
  • Aug 5, 2013 12:52am Aug 5, 2013 12:52am
Quoting brendad
Well my friend. I suggest you wonderful reading below extractions from the article "Have you ever asked yourself why you take profits too early, but let your losses run to the full stop? Have you ever wondered why you feel the tension, emotion and desire to close your winning trades too early before hitting your take profit level – even though the trade is already in profit and moving favorably for you? " There is an underlying reason for this, which actually goes beyond your emotions, trading history or experience. It is always present, yet is...

Hello Mate,

Thanks for sharing this lovely article. Learnt something beyond normal comments.
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