If you have a position in trading and you happen to monitor, if it's in a state once your profit may be used to calculate how many pips that you get before making a decision for closing. That is if you do not apply to profit-taking plan, and take profit decisions based solely on emotion.
In this article will be given an example of how trading with price action provides the potential for a hefty profit, as well as how to secure a position that has a profit and still open.
Take profit based on emotion and take profit based on logic
In fact, many traders are taking profit just because of emotional distress, does not comply with the agreed targets exit earlier in the trading plan, or even possible without a target and unplanned. Consequently take profit generated because emotions are much smaller than they should be obtained, in addition to often feel hesitant and sometimes panic when the price action reversed. Instead apply a disciplined trading trading plan with a planned exit targets a profit in accordance with the risk / reward ratio that has been established, without doubt or panic.
GBP / USD daily in the following figure exemplifies how a trader who hesitate or shy may take profit when a price movement has reached its peak area, and ignore the instructions to the moving average indicator of profit that should be obtained completely charred.
Even if eventually the price will go up another problem, because the logic seen from opennya position, the trader should be able to take profit or lock in profits (by moving the stop loss level / trailing stop loss) on risk / reward ratio of 1: 2 or 1 : 3 in area (2).
Let the market determine its own moving
Many traders exit manually because the price movement began against his position, but then turned again after the execution is done exit, or exit at breakeven because seeing signs that prices will turn around, but it did not. Traders are thinking as if they know what will happen to the price movements in the market.
Well, actually no one knows and can ensure the market price movements, not to mention the most top professional traders. Important and we need to do is believe fully in our trading plan, and the risk / reward ratio that we agreed upon. Let the market determine the movement itself, we take and siasati through trading and money management strategies that have actually been tested. We must always improve reading ability in the probability of price movements in the market conditions vary. If we are playing the market with frequent open position until overtrade, or trading with carelessly, sooner or later we will be annihilated account strategies take profit no matter whatever we pursue.
Take profit in trending market conditions
If the market is trending strongly, we can reap a significant profit by sliding the stop loss (trailing stop).
The following example AUD / USD daily with indicator ema ema 8 daily and 21 daily as a support level with an uptrend market conditions.
Take profit on market conditions ranging (sideways)
Sideway market is characterized by the limits of the upper and lower range. We determine the level of entry and exit to the formation of the pin bar that formed at the boundaries of the range. For example, consider the chart of GBP / USD daily following:
Take profit at the risk / reward ratio of 1: 2, 1: 3, or preferably with a trailing stop?
Although no one actually knows what will happen to the market price movement, from the various methods that have been tested, in general when the market is trending strongly, then apply a trailing stop is the most appropriate strategy in order to reap big profits. We slide stop loss initially at point 1: 2, then 1: 3, and if the market conditions are still allowing it never hurts to be increased again