News & Analysis at your fingertips.

We use a range of cookies to give you the best possible browsing experience. By continuing to use this website, you agree to our use of cookies.
You can learn more about our cookie policy here, or by following the link at the bottom of any page on our site. See our updated Privacy Policy here.

0

Notifications

Notifications below are based on filters which can be adjusted via Economic and Webinar Calendar pages.

Live Webinar

Live Webinar Events

0

Economic Calendar

Economic Calendar Events

0
Free Trading Guides
Subscribe
Please try again
More View more
Real Time News
  • Join @ddubrovskyFX at 20:00 EST/00:00 GMT for a webinar on what other traders' buy/sell bets say about price trends. Register here: https://t.co/AzOQioRZER https://t.co/h2DAnqnY7J
  • #BlackRock: We are neutral U.S. equities. We see U.S. growth momentum peaking and expect other regions to be attractive ways to play the next leg of the restart as it broadens to other regions, notably Europe and Japan $SPX $NDX
  • #BlackRock: The new nominal theme leads to a steeper yield curve expectation than market pricing. We see yields rising gradually, keeping us broadly underweight government bonds, particularly for longer maturities #trading $TLT
  • BlackRock: We are overweight European equities, and neutral Japan #trading
  • Gold prices face off with rising Treasury yields as jobs data approaches. Meanwhile, iron ore prices caught a small bid on bullish port activity out of China. Get your market update from @FxWestwater here:https://t.co/A79cY6KvDI https://t.co/rJ0xqsUPu1
  • Key levels in forex tend to draw attention to traders in the market. These are psychological prices which tie into the human psyche and way of thinking. Learn about psychological levels here: https://t.co/8A1QhwvklO https://t.co/cRqAcvYkI8
  • #Blackrock: We are moderately pro-risk and keep some cash to potentially further add to risk assets on any market turbulence #trading $SPX $RUT $DJIA
  • RT @BrendanFaganFx: Natural Gas Outlook: Price Continues to Soar as Severe Winter Shortage Looms $NG $NG_F Link: https://www.dailyfx.com/forex/market_alert/2021/09/28/Natural-Gas-Outlook-Price-Continues-to-Soar-as-Severe-Winter-Shortage-Looms.html…
  • USD/CAD is set to snap a five-day sell-off with today’s rally breaking near-term downtrend resistance. Get your $USDCAD market update from @MBForex here:https://t.co/GhpA2pJJqL https://t.co/sDuE9WdDEg
  • US natural gas prices continue to rise, with Henry Hub futures eyeing the 2014 high of $6.493 mmBtu $NG $NG_F https://t.co/ZtvB0X9uGR
Avoiding Taking Profits Prematurely

Avoiding Taking Profits Prematurely

Richard Krivo, Trading Instructor

Instructor's Response:

Nice job on employing Moving Averages to take this trade in the direction of the trend on this Daily chart of the USDJPY. You demonstrate a good understanding of this concept.

Since your stop is only 40 pips in each case but the limit you have set is providing many times that amount in terms of profit, the Risk Reward Ratios you have in place (1:9 and 1:7.5 respectively) are very strong. For the record, we look for at least a 1:2 RRR on every trade.

In this case, this USDJPY continued to move to the downside so I can understand why you asked about taking profits too soon. A plan that a trader can employ to take advantage of an ongoing move without having their entire position at risk is to trade multiple lots and scale out of the position.

For example, let's say that you opened 3 lots on each of these trades. As soon as the trade reached the 1:2 RRR, in this case +80 pips, one lot could be closed out and the stop could be moved to your initial point of entry...a breakeven stop.

As the pair progressed, another lot could be closed at the 1:3 RRR point...in this case that would be +120 pips. (3 x 40 pip initial stop = 120 pips) On the last lot the stop could be trailed at a respectable distance, let's say a hundred pips or so, to capitalize on any additional profit should the pair continue to move in your favor.

Chart 11 13 09

DailyFX provides forex news and technical analysis on the trends that influence the global currency markets.

DISCLOSURES