Currency Market

The importance of profit taking positions in currency trading

The importance of profit taking positions in currency trading

In order to increase security in Forex trading traders advised especially loss mandatory stop position (SL) position protection because it protects the capital of large unexpected losses. But at the same time, without the right reasons, to a lesser extent, it emphasizes the importance of the Take Profit protective position (TP) in trend positioning.

The importance of profit taking positions in currency trading, Forex, Forex and currency market, Currency Market, Currency Trading,

It is true that emphasizes the importance of TP, but sufficiently clear explanations, which often contributes to the arbitrariness that trade never finds its justification.

In fact, every time we talk Risk Management, the first of the first reflections on the level of risk that is present in case the price change trend. The risk of an unwritten rule occupies the attention of traders to protect against losses, but not justified, since the operations change their vocation is something completely different. In essence, trade for a profit and that is our main task, and protection against loss represents only a constituent part of the contract to the final attainment of the objective.

So the question is - which is based on the emphasis on SL in connection with the TP? In conclusion, the controversy is certainly clear that these two positions equally important and indispensable if we want protection security trade show in the foreground. In practice, we can no longer allow our trade that goes on and on in the minus sign, it is also expected that you can not go on indefinitely is not the plus sign.

The way to reconcile our aspirations to big profits with the real danger of a possible loss actually are TP protective position and SL, and according to the proportional relationship of the benefits and risks based on analysis appropriate market and early money management, with proportionally more determined attitude in favor of positive transactions.

The importance of profit taking positions in currency trading, Forex, Forex and currency market, Currency Market, Currency Trading,

The graph is presented simply designating positions of protection that contributed to the realization of a benefit to the parametrium "bookworm" and thus corroborate the notion of a safe trade. Opening buy positions according to the analysis of price movements after the cross-section of the median line up Bollinger and cut two EMA brought 40 pips profit on the basis of TP calculation proportional to E (ratio 2: 1 ) prices local minimum value at which the ES has taken (E = 20 pips positioned on the lower horizontal dotted green line).

A TP positioning accuracy level the top horizontal line is also proportional budget supports, and recovery rates on the top line of Bollinger and the same degree in previous growth candles.

An example clearly shows that price "led" above the trend line TP and outside the lines of the rapidly oscillating prices Bollinger result in the consolidation of the channels and the subsequent change of trend (intersection of two EMA report-arrow down).

Any later leaving an open position, in this case, would not bring a greater number of pips in relation to the TP projected. In most cases, the market situation is similar scenarios, even after the consolidation of prices increase more. However, it should be understood that this is subject to further analysis of long-term charts, but it certainly does not matter to the positioning table M15, where the open position. In this regard, it should be absolutely eliminated, the benefits can be extended in a straight line with time in the future in relation to the TP projected because in price fluctuations Meanwhile may occur below / above the level of the position input (for example, chart decline rates are shown below the lower horizontal trend lines) for the TP position omission may result not only in loss of potential earnings but also the loss of part capital before the opening of trading positions.

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