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The advice below is practical advice which you can apply, in the real world of trading to maximize growth on your trading equity while at the same time, minimizing the downside volatility on your account. Let's look at how long you should run your profits and we will not just see this point in relation to the trading signal which you have in the market but also, the overall performance of your account.

Trend Following Running Long Term Profits

The best profits in Forex trading are made following the long term trends in a currency pair which can last for several weeks, months or longer. A look at your currency trading charts will show you this but keep in mind – your looking backwards! When you are trading the trend going forwards, you view will be coloured by the numerous dips in open equity which occur along the way which will have you thinking is the trend about to end or will prices turn back the way you thought?

In terms of long term trends, you should use weekly and daily charts together and once a trend is in motion try and find a level which lines up on both charts and place your stop here and keep training it up. As a general rule moving averages are a great way to gauge the strength of a trend and when it might end. To help you follow long term trends in this manner consider that retracements back to the 20 day moving average or a support / resistance level just behind this moving average - are NORMAL in any big trend. Your stop needs to be further back and you will notice in other areas of this site, we like to have a stop loss behind a 40 day MA or nearby level of support or resistance.

All big trends end so I also like to have a profit target per trade which if reached, stops are tightened or profits taken regardless of where the trend might go next. Sot here comes a point (which is 10% profit in terms of overall equity on my account)where I will jack my stop up or take simply take profit on the trade.

Profits Take them – When Prices Fail to Follow Through

If you are in a trade and it can be - a trading signal you have just entered into the marker or a trade which is failing to take out resistance (when you are long) or holding support (when you are short) which you believe, should be following through and prices are not, that you should consider simply taking your trade out of the market. If a currency doesn't follow through in the direction you think it should you should just exit the trade at a profit or at a loss an move to the sidelines. I do this a lot on breakouts – if they don't follow through in the direction of the breakout as I think they should I just get out.

Accept Smaller Profits When Your Account is Not Doing Well

When you are not doing well on your account equity overall and your trading strategy is giving you a number of consecutive losses, its time to start taking some profits early to stabilize a fall in account equity and get some profit on the book. When I am losing my trading frequency declines, leverage is reduced and I will focus above all else on equity preservation and nipping in some smaller profits to stop the decline and get my equity moving up. In this scenario, my running of profits is dictated more by account performance than by the chart set up and how good it looks long term.

Big Profit Windfalls Take Them

It doesn't happen that often but when it does its once of the best feelings you can have as a Forex trader and its when a trade explodes into profit, as soon as you enter your position in the market and you pile up a huge amount of profit quickly. My own view of these moves is to take them. Normally an explosive move up or down, doesn't last for long and I will look at my charts and see if the market is overbought in a long trade or oversold in as short trade and if the price – I will take the profit and put it in the bank. When you get a big windfall on one trade, just take it. Big price spikes are emotionally driven and tend to fade so be happy with what you have and get out.

Taking Partial Profits

If you want to, you can take partial profits in any of the above scenarios when you are happy with the trade profit and run a reduced position – you are scaling out of a position and I find this is a great way to trade. As I general note I like to scale out of positions and also into them sometimes to fish a top or bottom with a small position and then load it up later when a contrary trade is confirmed as a significant trend change.

Avoid the I could have Done Better Regret Syndrome

When you look at the above tips you ill find when you use them in the market, you will still miss a lot of profit you feel “you could or should have had” but that is looking backwards – the above trading tips, are designed to help you survive and get a reasonable amount of profit to grow your account equity over the long term which of course is the aim of all Forex traders.

Final Words

I work on the following assumptions in terms of running profits on my trading system and my philosophy can be summarized by the following:

- Put stop loss orders away from normal retracements in any trend

- Have a profit objective on a trade and move to protect regardless of the outlook for the trend.

- Take any windfall profits quickly when the chart is showing overbought or oversold

- Reduce profit targets in periods of account equity drawdown

- Bank partial profits to smooth the volatility of a trading accounts performance

- Focus on Account equity as much as trade equity in terms of profit taking 

I Hope you find the above tips useful in helping you run profits for long enought to malke money with your trading strategy and keep in mind there is a time to get out the market and protect what profits you have - there is always a time when its time to take profits and run. 

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