How do YOU stay in a winning trade? | Forex Factory

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How do YOU stay in a winning trade?

  • #1
  • First Post: Jan 7, 2015 7:31am Jan 7, 2015 7:31am
When I trade I find my long term predictions on market direction to be quite accurate, but often I get shaken out of a position(s) long before my target has been met and then struggle to get back in and rebuild a sizable position. For instance the trends in USD/CAD and USD/JPY over the last year or so.

So, the questions are simple. There are no right or wrong answers, just post what works for you.

What method keeps you in for the long haul?
How do you protect your floating profit?

To look at a daily or weekly chart, in hindsight it's very simple. Just put your stop at BE and let it ride. But this doesn't take into account the mental anguish of watching a wildly profitable position move against you. Where do you draw the line and take some profit off the table, and how do you do this without impacting greatly the profitability of riding the position long term?

Looking forward to an interactive discussion!
Freedom 30?
  • #2
  • Jan 7, 2015 7:40am Jan 7, 2015 7:40am
The reason I post this is because I trade longer term due to my busy job, but have a terrible time holding onto a winning position through the volatility, when I can easily lose or gain more than I make working in a week.
Freedom 30?
  • #3
  • Jan 7, 2015 8:13am Jan 7, 2015 8:13am
Congratulations, predicting long term movements accurately is a huge advantage and will make you rich!

I also trade long term and holding on to a winning position was the hardest thing I had to learn. This is what helped me:

1. cut position size until I felt comfortable holding on through the volatility
2. learn to start small and increase the position size as it moves more and more in my direction
3. I got rid of SLs, once I learned how and where to enter a new position
4. Do other activities, play a sport, invest in other financial instruments (stocks, bonds, commodities, futures, etc), meet friends - Fx isn't the only thing in life
5. Start up a business and run it - having other sources of income takes emotion away from ups and downs in equity
6. Invest in other businesses - becoming a professional investor, the focus becomes managing the portfolio rather than one trade in Fx

Not sure if it helps but it's what I do
  • #4
  • Jan 7, 2015 8:36am Jan 7, 2015 8:36am
I take profit at support/resistance levels that I have already mapped out on the chart and attempt to re-enter after a retrace to the previous support/resistance. In reality I tend to re-enter too soon before the retrace has fully run its course because I fret that I will miss the boat while waiting for the absolute best re-entry point. This means I need to sit through the last part of the retrace before the pair resumes its original course but I keep a large excess in my balance to withstand the losses during this period. Given that I don't know for sure when exactly the pivot will happen, I usually just hold the position through the losing phase rather than keep on exiting/entering. I have come to accept that I will never be able to pin point exactly the timing of all the pivots. I agree with you that it is agonizing to hold a position through all its ups and downs and I do not have the patience and mental fortitude to do this.
  • #5
  • Jan 7, 2015 8:59am Jan 7, 2015 8:59am
Also, I do not use stop loss. Ever. Since I have conviction on the long term trend and therefore trust that movements in the opposite direction are temporary, and since I keep enough of a capital buffer to absorb losses during these periods, I do not feel the need to use stop loss. I know this is a high risk strategy and most people will think me foolish. It can also only be done if you have the capital. However, I am much more profitable since I have stopped using stop loss. Previously when I used it as the textbooks told me to I was always cutting my profits short or making lots of small losses on trades that would have gone on to yield huge profits had I not been stopped out prematurely. Small losses add up. and there are always going to be freak spikes that fck you over in the blink of an eye by hitting your stop loss when otherwise you had a perfectly good trade.
  • #6
  • Jan 7, 2015 9:02am Jan 7, 2015 9:02am
Quoting Torrent
What method keeps you in for the long haul?
Fundamental Analysis.
Quoting Torrent
How do you protect your floating profit?
Technical Analysis.

If you have a trouble trailing your positions, IMHO you should study charts a bit more, keeping in mind that you can't squeeze out trends 100%
  • #7
  • Jan 7, 2015 9:06am Jan 7, 2015 9:06am
So Silver and Lizzy,
when you say you aren't using a stop loss, are you just leaving the positions at BE and letting it ride?

Lizzy,
Timing the retrace is my biggest issue as well. Like you, always too early!
Freedom 30?
  • #8
  • Jan 7, 2015 9:10am Jan 7, 2015 9:10am
Quoting Tingus
{quote} Fundamental Analysis. {quote} Technical Analysis. If you have a trouble trailing your positions, IMHO you should study charts a bit more, keeping in mind that you can't squeeze trends 100%
Sometimes I think I study the charts too much and over think myself out of a position.
I do have scads of chart time, I think my main problem is that I don't have the unconditional patience to ride out retraces.

Spending more time on the fundies has definitely helped give me more conviction in my directions though.
Freedom 30?
  • #9
  • Jan 7, 2015 9:31am Jan 7, 2015 9:31am
Quoting Torrent
I think my main problem is that I don't have the unconditional patience to ride out retraces.
I feel you When profits are good it's definitely hard to keep them running and every time I have temptations like shutting my positions early - I remind myself of those times when I closed them prematurely and a bit later they turned out real fat fat winners I had such moments so many times that discipline is like breathing to me now.

I suppose you have to burn yourself enough times to learn the right way. As it was the case with me.
  • #10
  • Jan 7, 2015 9:49am Jan 7, 2015 9:49am
I open a trade and draw a line where I want to take profit for that particular leg and let it ride until that point. No stop loss, so if it goes backwards it goes backwards. It could go way beyond my breakeven point, but then so what if I have the conviction that it will return to its long term course sooner or later? Since I tend to re-enter too soon (this is what I am concentrating on the most to fix at the moment) trades quite often go into negative territory before turning back on track. The worst I've had was maybe around -300 pips..? But as it keeps retracing and taking me further into negative territory I keep averaging down so that when it finally does pivot I might have a few positions open, ready to compound the gains. I trade in one standard lot size only (US$100,000) and have a maximum of 5 lots open at any one time on any given trade (so, I allow myself to average down up to four times if I re-enter too early). I set the T/P point of each leg typically 30-150 pips away depending on how close to the computer I can stay (i.e., how actively I can trade) and how far apart the support/resistance levels are in the chart in question.
  • #11
  • Jan 7, 2015 10:01am Jan 7, 2015 10:01am
Quoting Tingus
{quote} I feel you When profits are good it's definitely hard to keep them running and every time I have temptations like shutting my positions early - I remind myself of those times when I closed them prematurely and a bit later they turned out real fat fat winners I had such moments so many times that discipline is like breathing to me now. I suppose you have to burn yourself enough times to learn the right way. As it was the case with me.
That is exactly it! I would get stopped out several times, get frustrated and trade a different pair only to come back a few months later and realize that if I had only held my original positions, I would have tripled or quadrupled the account.

I have made significant strides over the last year though, I can see myself gradually becoming more patient.
You definitely do have to burn yourself several times to really get it.
Freedom 30?
  • #12
  • Jan 7, 2015 10:03am Jan 7, 2015 10:03am
Quoting LizzyBennet
I open a trade and draw a line where I want to take profit for that particular leg and let it ride until that point. No stop loss, so if it goes backwards it goes backwards. It could go way beyond my breakeven point, but then so what if I have the conviction that it will return to its long term course sooner or later? Since I tend to re-enter too soon (this is what I am concentrating on the most to fix at the moment) trades quite often go into negative territory before turning back on track. The worst I've had was maybe around -300 pips..? But as...
I take my hat off to you!
Freedom 30?
  • #13
  • Jan 7, 2015 10:11am Jan 7, 2015 10:11am
Quoting Torrent
So, the questions are simple. There are no right or wrong answers, just post what works for you. What method keeps you in for the long haul? How do you protect your floating profit?
//-----

hey torrent..... those questions might be simple but answers might not.....

what helps me stay in for the long haul, if that's my intention, is keeping the average price greater than 50% of the possible retrace...... the indicator seen below is better explained here.....

the next step is when adding new positions what will be the impact on the average price..... this is done in a similar way where a 'fake' order can be added into the mix which will change the average price seen, the magenta line......

try to keep your average price above 61% if possible...... selectively close the lower most vulnerable orders first....... or at least that helps me......h

//------
Attached Image (click to enlarge)
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to trade and code, keep both simple... no call to impress....h
  • #14
  • Jan 7, 2015 10:21am Jan 7, 2015 10:21am
Haha, Torrent/Tingus, I quite often have the opposite problem. When profits are adding up I think I can eke out some more and move my T/P price further away only to find that the place I originally planned to take profit was the best point and the point after which the pair started back tracking. I kick myself thinking I could have taken money off the table and re-entered at a better price. Every person has his/her own ratio of fear and greed, and for me, greed trumps fear more often than the other way round, sigh... I have improved quite a bit in this regard though and am lately successfully holding back my tendency to extend the target price when things are looking good. I tell myself that I can always re-enter, almost always at a better price, and that there is no need to try and get all the pips in one go
  • #15
  • Jan 7, 2015 10:30am Jan 7, 2015 10:30am
Quoting hayseed
{quote} //----- hey torrent..... those questions might be simple but answers might not..... what helps me stay in for the long haul, if that's my intention, is keeping the average price greater than 50% of the possible retrace...... the indicator seen below is better explained here..... the next step is when adding new positions what will be the impact on the average price..... this is done in a similar way where a 'fake' order can be added into the mix which will change...
Thanks for stopping by Hayseed!
So to clarify, you want to make sure that when the daily retracement occurs to 50% or 61% of its potential move, that your average price is still profitable as a whole?
Freedom 30?
  • #16
  • Jan 7, 2015 10:31am Jan 7, 2015 10:31am
Quoting LizzyBennet
Haha, Torrent/Tingus, I quite often have the opposite problem. When profits are adding up I think I can eke out some more and move my T/P price further away only to find that the place I originally planned to take profit was the best point and the point after which the pair started back tracking. I kick myself thinking I could have taken money off the table and re-entered at a better price. Every person has his/her own ratio of fear and greed, and for me, greed trumps fear more often than the other way round, sigh... I have improved quite a bit...
True story!
Freedom 30?
  • #17
  • Jan 7, 2015 11:20am Jan 7, 2015 11:20am
Quoting Torrent
Thanks for stopping by Hayseed! So to clarify, you want to make sure that when the daily retracement occurs to 50% or 61% of its potential move, that your average price is still profitable as a whole?
//-----

hey torrent...... that's correct..... but of course the timeframe varies with your intended target,,,,, could be less than the daily, perhaps the 240 chart....

when ibfx shut down mq4 accounts last September i still had open usdjpy long trades all the way down to 78..... so there my retracement was on the weekly scale..... my target was and still is 148......

when speaking of shorts , adding new positions below the average pulls that average down..... opposite for longs..... so care must be taken......

there will come a time in the current trends direction that a retrace is more to be expected.... this is where knowing the average zigzag length on every timeframe on every pair is valuable..... and also knowing the frequency opposite signals based on other indicators appear......

in other words, if a positive macd cross is approaching or the stoch(12,5,3) is below 5, it might be better to wait till it clears to enter new shorts.....


it helps keep me from adding new short positions when history suggests a 200 pip retrace is due within a few days......h
to trade and code, keep both simple... no call to impress....h
  • #18
  • Jan 7, 2015 11:44am Jan 7, 2015 11:44am
Torrent, find out WHY you do WHAT you do. Start observing patterns, your patterns, your entries, your exits..you might find out there's pattern in that. If you don't like it, change it. Find a way around it. Say you get out way too early. Ok, just don't! next time you'll be drown to exit a trade..cause "I'm sure trend is over" remind yourself of the past occurences where that exact pattern made you exit and how do you view that decision now. Wasn't it just the low and soon after the market flew into new highs? You have an opportunity to shift that pattern. Maybe adding extra "X" pips to your SL would give you great opportunity on average to stay in a trend. Here and there you might lose some more but over time since you tend to take certain trades..your profitable enough for you make it up nicely in the trends. That's just an example, only you can find out what works for you. Because only you knows yourself. Others can guide you, but the real job is up to you.

You are invited to become more conscious about you and why you do what you do. So whenever you are about to do some "known" pattern..just pause and feel into it. Why do you want to do that? Is it just a pattern that you do, you don't like it..but you do it anyway and don't even know why? Then how about stopping it?!
Is it a gut feeling or just some fear? Could be even fear masked as a greed.. Just be with that for a while. Is it real or does it just fade away? Your body will help you discern all the signals, over time.

Trade when the market tells you, invites you for a ride, not when you just wanna trade because whatever..
We tend to focus on charts, analysis, fundies or whatever. Since you as a trader are the most important component of that..how about you actually focus on "analysing/understanding" you? Find out what makes you tick. The more you do that, the more you enjoy the game and the better you are at it.
Markets wispers, just tune in.
  • #19
  • Jan 7, 2015 11:51am Jan 7, 2015 11:51am
Very interesting Hayseed, thanks!
Freedom 30?
  • #20
  • Edited 12:25pm Jan 7, 2015 11:57am | Edited 12:25pm
Quoting plukin
Torrent, find out WHY you do WHAT you do. Start observing patterns, your patterns, your entries, your exits..you might find out there's pattern in that. If you don't like it, change it. Find a way around it. Say you get out way too early. Ok, just don't! next time you'll be drown to exit a trade..cause "I'm sure trend is over" remind yourself of the past occurences where that exact pattern made you exit and how do you view that decision now. Wasn't it just the low and soon after the market flew into new highs? You have an opportunity to shift that...
Now that you mention it, I think the market is easier to analyse than myself!

I have done quite a bit of soul searching over the past year or so and it has definitely been beneficial.
I think, as you may have been hinting at, that usually the right decision is also the hardest one and the one that make you the most uncomfortable.
So in that sense, it should be easy to know what to do........ Whatever I don't want to!
Freedom 30?
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