Locking in profits

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Locking in profits

Post  ilearn2t on Sun Jul 08, 2012 6:26 pm

Hello Everyone

1) The simplest type of locking in profits is the TrailingStop method which simply moves along behind a position as that position begins to move in the traders favour. It will move up behind a long position or down behind a short position as the position moves in the traders favour, if at any time the position begins to move against the trader, the TrailingStop does not move, essentially locking in a large portion of the gains the trader has made up to that point.

Most trading platforms will allow you to set a fixed trailing stop on the platform so you do not have to manually manage the order.

2) Manually move your StopLoss at the minimum parameter level allowed behind your profit gains.

Example:

On most 4 digit brokers (Micro & Standard) platform the minimum level is 10 pips, so if your order reaches a 15 pip profit you can lock in a 5 pip profit, you can manually move the StopLoss as you like or simply use the auto TrailingStop.

Remember the minimum (15 point) TrailingStop would kick in at the zero point market price level, so this option gives you a 1 pip profit from a 11 pip gain.

3) Open two same currency pair orders using same lot size in the same direction and allow both to reach your TrailingStop level now only place a TrailingStop on one order and a BreakEven order on the other, now place an opposite same currency pair order same lot size to within a range of first order (BreakEven) price allowing for spread not to close both orders at the same time.

Good luck
ilearn2t
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