What methods do you use to let your winners run? | Forex Factory

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What methods do you use to let your winners run?

  • #1
  • First Post: Jan 8, 2014 3:39am Jan 8, 2014 3:39am
I've been trading for quite a few years now but I still struggle with letting my profits run, I have a clear plan before taking a trade and with targets in place, but I still seem to intervene and reduce my gains time and time again, I've looked at adding indicators to signal a change in direction but I still seem to convince myself that closing the trade is the best option.

I've even closed portions of the positions to satisfy my need to take some profit but when I look to lock in my trade for break even I seem to believe that i'm better off taking my profit as it's more likely that i'll be stopped out before it continues further in my direction.

My latest example was taking 3 longs on the gj yesterday between 171.40-50 with a target area of 172.50-173, I sat through it all day holding on around 0-20pips, and despite everything looking favorable during the night I closed between 171.70-90 with price currently now at my original target area, I had £20pp total on the positions but even when I closed to reduce this to just £2pp and 50pips up I still couldn't manage to just lock in this trade and let it go.

I wish I could stop this so please tell me what methods you use to help stay in the trade?
  • #2
  • Jan 8, 2014 4:09am Jan 8, 2014 4:09am
I risk only the amount of money (%) that is comfortable to me in case of a loss.
And I use trailing stops to protect my profit.

... the rest is the market that decides.
  • #3
  • Edited 5:16am Jan 8, 2014 4:51am | Edited 5:16am
I've experienced this problem.

I determined it was due to losing focus as a result of being influenced by current events, negating the original reasons for entry and associated plan. Extending the time horizon seems to have helped me, getting used to leaving positions alone for a day and then adding to them if my analysis proves correct. I also log out of my broker platform (I use LMAX) as I find watching your P/L going up and down is very hypnotic and can cause short term mental blockage resulting in doing things you wouldn't normally do.

Hope it helps.

Quoting Tom_d
I've been trading for quite a few years now but I still struggle with letting my profits run, I have a clear plan before taking a trade and with targets in place, but I still seem to intervene and reduce my gains time and time again, I've looked at adding indicators to signal a change in direction but I still seem to convince myself that closing the trade is the best option. I've even closed portions of the positions to satisfy my need to take some profit but when I look to lock in my trade for break even I seem to believe that i'm better off taking...
  • #4
  • Jan 8, 2014 5:07am Jan 8, 2014 5:07am
Hi Tom,

this is something that I used to consider quite important and now I would say it is almost the only element you need to learn to make big profits. Obviously there are other important elements but securing large RR can make almost all strategies very profitable.

There are a few issues you need to get clear to make it work,

1. Your win rate will almost definitely be below 50%... are you ready to take losers all day or all week to catch the moves?

2. You have to know what to expect from lower win rates, mathematically if your win rate is 40%, every 100 trades youre almost guaranteed to have 8 straight losses....can you stomach that?

3. Moving to break even does not increase profit. It will just reduce losers and reduce winners, If youre looking for a 3/10 winner why risk killing it off?

4. Simple trend following strategies usually make the most profit around 25/1 RR.... are you thinking in those terms or the brokers preferred RR of 2/1 or 3/1..

Good luck, youre at least looking at the right stuff in my opinion
tradewith60
  • #5
  • Jan 8, 2014 5:10am Jan 8, 2014 5:10am
p.s watching trades doesn't help anyone...step away, let it go TP or SL will help
tradewith60
  • #6
  • Edited 8:57am Jan 8, 2014 7:52am | Edited 8:57am
Disclaimer - I am not an experienced trader.

Hi,

I think that this is one aspect that shows how Forex is all about psychology. Everyone reacts differently to seeing profits disappear.
It seems that you have a hard time stopping yourself from locking part of your profits by fear of losing them and end up being stopped on a small retracements before the big move.

From my short experience, it seems to me that a more profitable strategy would be to be ultra picky about the setups you enter, hoping to have as little draw down as possible, place the SL to break even as early as possible, and then just wait risk free hoping to catch a nice trend.

Missing on some profits isn't a risk. Taking too many trades because you're only trying to make 20 pips and end up trading less than top potential setups, that's very risky on the long term I think.
I'd rather break even 9 times and catch a good trend on the 10th trade. In Forex not losing is much more important than winning, am I wrong?

It all boils down to discipline I guess.

After that it probably takes years to recognize which setups have the potential for a big move, which is what I'd like to learn...

GL with your trading
S
  • #7
  • Jan 8, 2014 7:57am Jan 8, 2014 7:57am
Tom D I'd say you are lazy because you don't want to figure out a method by your self. Anyway here's mine:

-Trail half tightly and when it hits, leave the stop of the other half where it is (don't set it to BE)
-Trail the other half loosely
-When scaling in trail the whole second position with the first one

  • #8
  • Edited 12:14pm Jan 8, 2014 11:45am | Edited 12:14pm
Quoting Vitez
Tom D I'd say you are lazy because you don't want to figure out a method by your self. Anyway here's mine: -Trail half tightly and when it hits, leave the stop of the other half where it is (don't set it to BE) -Trail the other half loosely -When scaling in trail the whole second position with the first one
I can assure you I'm far from lazy!!! This is my full time job and all i'm doing all day is trading related

My issue is that I keep breaking my rules or plans, it seems that no matter what I plan to do, I change when in a decent trade, I've sat in losing positions for weeks before but when they have come back into profit I've generally only been able to stay in for a day or 2, even when I'm confident of larger gains I just cant seem to stop the closing of profits.

I've made a decent profit the past 14months, and I am consistantly profitable but just wish I could let price get to my targets,

thanks for all the replies, I have tried so many things but maybe the closing of the laptop might be the best way, I trade off 4hour charts and typically gain 80-120pips on the winning trades but of course many of these go over several hundred more had I left them.
  • #9
  • Jan 8, 2014 11:53am Jan 8, 2014 11:53am
Quoting 60minuteman
Hi Tom, this is something that I used to consider quite important and now I would say it is almost the only element you need to learn to make big profits. Obviously there are other important elements but securing large RR can make almost all strategies very profitable. There are a few issues you need to get clear to make it work, 1. Your win rate will almost definitely be below 50%... are you ready to take losers all day or all week to catch the moves? 2. You have to know what to expect from lower win rates, mathematically if your win rate is 40%,...
Thanks for this post , funnily enough I can stomach losses no problem, I've seen some scary dd but have always managed to be ok about it, I seem to just have issues when seeing profit of over 1k, just over the xmas period I had big positions on gj and ga, I ended up closing for £250 having seen it float around -£100-£500 for a couple of days then to find by the end of the week they'd have reached £8k's worth which was where i'd originally put a target in, and the amount of times that's happened over the past year is silly!
  • #10
  • Jan 8, 2014 11:56am Jan 8, 2014 11:56am
Quoting Tom_d
What methods do you use to let your winners run?
FYI, i have just read the topic title and not even your post,
Answer would be emotion control techniques (inside mind emotions; not the ones on face when we stress while defecating)

sorry for such a useless post but donno i felt like answering.
Plz waste your 10 seconds & report this for deletion , just in case
100 Fold Challenge->Interested? ->https://www.forexfactory.com/thread/32152
  • #11
  • Jan 8, 2014 12:00pm Jan 8, 2014 12:00pm
Quoting alt11
Disclaimer - I am not an experienced trader. Hi, I think that this is one aspect that shows how Forex is all about psychology. Everyone reacts differently to seeing profits disappear. It seems that you have a hard time stopping yourself from locking part of your profits by fear of losing them and end up being stopped on a small retracements before the big move. From my short experience, it seems to me that a more profitable strategy would be to be ultra picky about the setups you enter, hoping to have as little draw down as possible, place the SL...
Yep, I've read "trading in the zone" a few times to help with this, it has a little, I remember just a couple of years ago that I could never let a trade go past 100pips, and it took me a long time to be able to let my winners go that far

cheers
  • #12
  • Jan 8, 2014 12:01pm Jan 8, 2014 12:01pm
Quoting forexsaint
{quote} FYI, i have just read the topic title and not even your post, Answer would be emotion control techniques (inside mind emotions; not the ones on face when we stress while defecating) sorry for such a useless post but donno i felt like answering. Plz waste your 10 seconds & report this for deletion , just in case
something I most likely need to spend time looking into,

thanks
  • #13
  • Jan 8, 2014 12:13pm Jan 8, 2014 12:13pm
Tom, I feel your pain

I do this for a living as well and have been very profitable over the past year however I find myself continually leaving good pips on the table. When I back test exits I continually see that had I left my limit where it originally was for the most part it would have hit.

You think this would be easily corrected however it really isn't. Best trades I've made seem to be those ones where I wake up and the unaltered limit I set was triggered while sleeping. That's not a bad problem to have although I need to get better at letting trades run while actively trading!
  • #14
  • Jan 8, 2014 12:18pm Jan 8, 2014 12:18pm
Quoting TranceTrader
I've experienced this problem. I determined it was due to losing focus as a result of being influenced by current events, negating the original reasons for entry and associated plan. Extending the time horizon seems to have helped me, getting used to leaving positions alone for a day and then adding to them if my analysis proves correct. I also log out of my broker platform (I use LMAX) as I find watching your P/L going up and down is very hypnotic and can cause short term mental blockage resulting in doing things you wouldn't normally do. Hope...
Thanks, it may just help
  • #15
  • Jan 8, 2014 12:28pm Jan 8, 2014 12:28pm
Quoting yazzie
Tom, I feel your pain I do this for a living as well and have been very profitable over the past year however I find myself continually leaving good pips on the table. When I back test exits I continually see that had I left my limit where it originally was for the most part it would have hit. You think this would be easily corrected however it really isn't. Best trades I've made seem to be those ones where I wake up and the unaltered limit I set was triggered while sleeping. That's not a bad problem to have although I need to get better at letting...
Yep, this mirrors my trading completely, I couldn't get to sleep last night so I messed with the trades at 2am, had I got my normal sleep I'd have been waking up to a whole lot more this morning!

funny thing is I used to think it was about the amount of money I sometimes trade with, but I was testing a system on gold a few weeks back, so I bought in at 1penny a pip to test it, I was 1000pips up in minutes and I still closed it despite it going far further over the next hour and with it having absolutely no impact on my account what so ever, lol, I've done the same on demo too.

I think my biggest mistake was april 4th last year on the jpy pairs, I was long and in a loss for 2 weeks on gj and ej, around 1000pips down overall, I was anticipating the news and woke around 4am, nothing had happened at the point so fell back to sleep then woke up to find I was 1500pips up and closed them the instant I saw, then just froze and didn't trade till the big 1000pip climb had finished!
  • #16
  • Jan 8, 2014 12:42pm Jan 8, 2014 12:42pm
Quoting Tom_d
{quote} Yep, this mirrors my trading completely, I couldn't get to sleep last night so I messed with the trades at 2am, had I got my normal sleep I'd have been waking up to a whole lot more this morning! funny thing is I used to think it was about the amount of money I sometimes trade with, but I was testing a system on gold a few weeks back, so I bought in at 1penny a pip to test it, I was 1000pips up in minutes and I still closed it despite it going far further over the next hour and with it having absolutely no impact on my account what so ever,...

I do few things to help this issue
I divide my lots into 2-4
I place orders 1/2 close 50-75 pips and other half move Stops to profit then let it run.You always want to add to your account.Problem is these days other then Yen pairs most pairs are in a range.So you are not going to get 1000pip on Euro best you can do is trade the range on bigger TF
Regards
In trading, you have to be defensive and aggressive at the same time
  • #17
  • Jan 8, 2014 12:56pm Jan 8, 2014 12:56pm
Maybe this will help;

Exited with 30 pips, could/should have got 60 pips...see how stupid we look when we close profits too early?!

I feel your pain, it's something I really need to work on as well.

All the best, good luck with your trading...
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  • #18
  • Jan 8, 2014 1:33pm Jan 8, 2014 1:33pm
i did lots of similar shit myself, i'd kill myself for it.

i've pondered this issue, it is actually not asking as your title does. it is in fact asks two questions:

1. does your method predicts roughly where market moves to next?
2. do you feel confident about this prediction?

it is not about some magic MM trick, BE or not BE, trail or not trail. It is all about your method's edge.

it is same as entry. a profitable method knows where to enter as well as exit. i can't trust a system giving wonderful entries but can only giving a 50pips TP exit. I don't believe we retailer can easily find such a profitable system (if it exits, the inefficiency of the market is huuuuuuge), in fact. You know the entry, you of coz also know the exit. it is like sunlight and shadow, wind and air. it is two sides of one thing.

after you have confidence in your system/method, just exit where it indicates, no matter 2 pips or 200 pips. long term speaking, it'll be great.

you asked a good question, i am helped too when thinking.

Quoting Tom_d
{quote} Yep, this mirrors my trading completely, I couldn't get to sleep last night so I messed with the trades at 2am, had I got my normal sleep I'd have been waking up to a whole lot more this morning!
  • #19
  • Jan 8, 2014 2:01pm Jan 8, 2014 2:01pm
The answer for me comes down to ONE thing and one thing alone.

When trading real money, your focus shifts from DOING the right thing to a focus on the RESULT or the outcome of each trade. This will always put pressure on making you want to bank a small win instead of letting it run. That's why a demo account performs so well - because there is no outcome! So you can be free to just do what you know is correct action.

A smarter man than me once said that as humans, because we always choose the comfortable choice, our actual/real results will be worse than 50:50

As soon as we realise that even in real life there is really no outcome because we will all be pushing up the daffodils we can shift our focus to doing right not what the outcome will be.
  • #20
  • Jan 8, 2014 2:24pm Jan 8, 2014 2:24pm
try reaching a past resistance/support level for a start, or daily range being hit
SEE LINE,TRADE LINE..PRICE HAS TO GO SOMEWHERE,,, PRICE WILL GO SOMEWHERE.
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