Why do we sometimes close trading positions by taking only 50-90 points, but meanwhile the market has moved in our direction, let’s say another 100 points?
Do we feel regret when we look at a chart and see “missed opportunities”?
No, not any regrets. We have been on the exchange markets of short-term and medium-term transactions for so long, we have seen everything that is possible to see in 24 years of activity, we have no emotions. They have atrophied (in relation to what is happening in the market). There is sober calculation and expediency.
Of course, we try to take as much profit (points) as possible on any transaction, but there is a rule in all short-term trading markets “better a bird in the hand than a pie in the sky.”
For example, breaking up or down a formed pattern (triangles, head and shoulders, tops and bottoms, etc.) gives us confidence in the price target, that we will be able to earn 300 points in a currency pair in 3-4 weeks (sometimes in a week ). Wow, beauty. Open your wallet and money will pour into it every day.
But what really awaits us? In fact, a difficult path awaits us, full of dangers. For a certain category of market participants who have serious financial capabilities and “hide behind” some reason, hitting our stop losses is not a pleasure, but a “earning”.
These and other reasons encourage us to weigh “necessary and sufficient” and exit a position with a profit (or reduce a position to lock in a profit) without unnecessary regrets about missed opportunities.
Check out one of the examples.
1.Sold EURUSD 1.1925. 2. Exited with a profit of 1.1850. The market went down to 1.1825, and then 3. It rolled back almost to our entry point – 1.1925. Question. Did we do the right thing by closing the deal at 1.1925? What if the market even went to 1, 20 or higher?
Second example. 1. Sold 1.1350. 3. Safely closed at 1.1250. The market dropped to 1.12 and then soared even above our entry point.
Third example. In a sideways trend again 1. sell 1.1350. It rises to 1.1375 and the rate plunges down. The bulls’ stops are triggered and the market flies 100 points in a few tens of minutes. 2. Our take profit is executed at 1.1385, we exit the position, and in a few hours the market again rises to the opening level of our position-3.
I repeat. We don’t have emotional experiences in the market.
Before opening each position, we write out several scenarios for the further movement of the rate of this currency or other instrument. We carefully weigh all the pros and cons. And in every transaction we are guided by the principle of “moderate greed”.
Therefore, we recommend that you listen to our recommendations, place orders clearly and not be “greedy”. You have already seen that in certain situations we hold a position for a more significant profit and 200 points.
This post is a general explanation for you, dear clients, in response to numerous calls and chat requests: “why did they close earlier, because they could have taken so many more points. So, on a 100K position, I earned $800 on a trade, but I could have made $1,300.”
Well sorry😊