How To Take Some Profits In Forex Trading
We need to know that one of the most important things in forex trading is managing a financial management system. Because with this financial management we can adjust the level of losses and profits that we can get in forex trading.
Steps that we can take to implement financial management include taking some of the profits that have been obtained in forex trading.
In reality, many forex traders forget this because they focus more on the current price movement so that the profits that have been obtained end up with losses due to the price reversing the direction of the previous movement.
Changes in profits to mines of course will provide psychological pressure that is not good for the trader himself, so most people, especially beginners, will cut losses to avoid more losses.
This loss event can occur due to several things including the lack of understanding of some traders to take advantage of the tools or facilities that have been provided in Metatrader to secure or take some of the profits they have earned.
For this reason, in this discussion, we will try to examine the importance and how to take profits or secure the results that have been obtained before the price movement reverses direction.
The Importance of Taking or Securing Profits Already Earned
Most or in general a traders will believe that in forex price movements, no one can be 100% sure where the price will continue. People can only predict the possibilities that will occur based on indicators and economic data and policies of the country concerned.
This uncertainty will make some traders anticipate their forex trading, such as closing some of their trades when they have earned a few points so that if the price reverses direction, they do not experience unwanted losses.
Doubt over the next move is sometimes a disturbing factor in forex trading, to avoid this, rational anticipation steps are needed to maintain the account or the profit that has been obtained.
Looking at the conditions above, we see that securing some of the profits that have been obtained or taking profits that are already insight is a very important action in forex trading.
Steps to Take or Securing Some of the Profits Already Earned.
Regarding the security of some of the profits that have been obtained, it can be done through the facilities or tools that have been prepared in the metatrader itself, namely:<.p>
- Trailing Stop.
- Manually Closing Part of the Lot Currently Open.
The two techniques above will help traders so that the profits that have been obtained can be partially secured or partially taken so that if the price reverses direction, the trader does not experience greater losses. (Read: Simple Money Management Formula )
How to Secure Profit Using Trailing Stop
As described above, one way to secure or take some of the profits that have been obtained is to use the trailing stop tool.
Step 1. After we open an open position in one of the currency pairs, then we can set the trailing stop value as expected by right-clicking on the current open position as shown on the right:
Step 2. After right-clicking and the tool appears as above, the next step is to set the trailing stop value by setting the expected point value.
As an easier illustration, the point value is the allowed tolerance interval, so that if the points value has been touched, the trade will be closed automatically.
Example. A trader opens a BUY at the price of 1.3150 with a Stop Loss of 1.3120. After a few hours, the price rose according to the prediction to touch the price of 1.3200 (Profit 50 points). Because the price is still able to go higher, the trader places a trailing stop by taking 30 points from the price of 1.3200. So if the price moves down after opening the trailing stop until it touches the price of 1.3170 (-30 Points) then the open position will be closed automatically and the trader will still profit 20 Points.
This trailing stop will work if we are live or online. So if the metatrader condition is offline then the trailing stop will not work.
How to Take Part of the Profit Manually By Closing Part of the Lot.
There are still many novice traders who pay little attention to the process of closing orders that are already open. When profits have been obtained, some people will immediately close all existing orders by closing them in their entirety.