Posts Tagged ‘stoploss’

Post courtesy of Triad Trading Formula

There are one or two currency exchange strategies that you can use to increase your profits, regardless of what foreign exchange trading system you may be using. Of course, all traders know that you must set a limit order or at least include a nice profit target or closing signal in your plan and keep to it. Either you are aiming for a certain number of pips or you are waiting for something similar to an overbought or oversold signal and then close immediately. Keeping a trade open for an undefined time, expecting to make the best of it and profit from each last pip, is a road to destroy. Sure it is annoying to close out a trade at 50 pips and then see the trend continue to two hundred, but how often does that happen? We have a tendency to remember trades like that and forget the others, so if you do not keep a record of what occurred after you closed a trade, now is the time to start.

If it turns out to be true then you might want to back test the results of adding to your profit aim per trade, but in ninety percent of cases you’ll find this does not happen often enough to justify that. What you may find nevertheless, is that it’s worth closing half your position.

Naturally, to do that you have to either be trading more than one lot or have a broker that accepts fractional lots. You can set a limit order for the first half but you must be watching the market so that at that point, you can set a new limit order for the second half and at the same time, move your stoploss. The new limit order could be half your original profit target or it may be the same quantity again, but not more.