Resolved Question
Is it wisest to close the position as soon as we suspect?
When we suspect that a trading position we had opened is wrong, is it wisest to close it immediately although it might go to the right direction later? This way our account is better protected.
about 1 year ago
Best Answer - Chosen by Asker
Hi,
Actually, you should have already answered this question BEFORE you open a position. Remember that one of the keys to profitable trading is to plan your trade, and trade your plan. When you plan a trade, you should already know where your stops & limits should go. If the market goes against you, no problem, your stop is there to protect you just as you hand planned.
If you have nevertheless opened a position without any specific plan and the market is going against you, don't try to fight it or out-smart it. If things are not looking good, close and take the loss. Not only will you lose less but this will also allow you to focus on new, more profitable and better planned, trading opportunities.
Hope it helps!
about 1 year ago
Source(s):
Answers (2)
I agree with Extocapital said. In my opinion, it is best to close a wrond and/or unplanned trade immediately even if you have to take a loss to save yourself from further losses.
about 1 year ago
* You must be logged in to add comments. Sign In or Join Askpips.com.
You should always have a stop loss point in mind before entering your trade. The stop loss is there to remind you that your trade idea has been invalidated and it's time to get out!
For example, let's say that you wanted to short at a key resistance level. If price were to go above that resistance point by 50 pips, you might consider the resistance point to be broken. Of course, the amount of pips for a stop loss largely depends on what trading strategy you take.
No matter what though, you should never set your stop loss based on how much you are willing to lose - it should be the other way around! If you desire to have a wider stop loss (because you think it'll give your trade more room to breathe) then you should make your position size smaller. Just keep these things in mind when placing your stop loss.
about 1 year ago
* You must be logged in to add comments. Sign In or Join Askpips.com.
Open Questions in Beginner
Resolved Questions in Beginner
- Should I go live? Please give me your advice on this.
- For a newbie, which currency pair do you think is the best to start with?
- Which do you think is better? Daytrading or Position Trading?
- For a newbie like me, is $1000 a good starting deposit in forex?
- I work full time and I'm wondering if signal providers really work. Has anybody had any experience with them?
* You must be logged in to add comments. Sign In or Join Askpips.com.