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Secure Your Profits - Greedy Is A Malmware

Sep 11, 2008
Have you ever convert your small profits to a big loss? If yes, then you have to repair your psychological trading. The main rule in forex trading is, profits, so secure and protect your profits in every trading. It will be a worst thing if you see your 15 points profit turn into minus 30 points cause of your target point is too high, without locking your current profits. Even if it is money that you are willing to lose, commonly referred to as risk capital, you need to look at it as you versus the market.

Like a soldier on the battlefield, you need to protect yourself first and foremost. Aware of forex market movement, which can move more than 100 pips within 5 minutes, known the volatility of every currency pair, this is a critical issues in forex trading, especially online forex trading.

There are two ways to secure and protect your profits from loss:

1. Using Trailing Stop
Traders can secure and profit by using this tools, trailing stop tools is available in all version of meta trader. Trailing stop works manually, and traders must activate it manually. Here is the illustration how trailing stops works:

If your target is 25 pips, then as soon as you are 25 pips in the money, move your stop to break even,If it moves lower and takes out your stop, that is fine, since you can consider your trade a scratch and you end up with no profits or losses. If it moves higher, by each 5-pip increment, you boost up your stop from breakeven by 5 pips, slowly cashing in gains.

2. Using Trade Quantity Size
Another way to protect and secure you profits, is setting up your trading size, which is has to be more than one lot. If you trade two lots, for example, you can have two separate profit targets. The first target would be placed at a more conservative level that is closer to your entry price, say 25 or 30 pips, while the second lot is much further away through which you are looking to bank a much larger reward to risk ratio. Once the first target level is touched, you would move your stop to breakeven.

Trailing stops become the most effective way to secure and protect your profits from loss, but this tools required manual setup and correct timing. Aware the risk in forex market will make you think twice if you want to implement greedy on your forex trading.
About the Author
Sayid Aksa is an experienced forex trader.
He is the admin of http://www.sayidaksa.com,
forex site which help traders to improve their trading knowledges in online forex trading
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