If I didn’t take profits as often as I do – I seriously doubt I’d be this far ahead. There are few worse feelings than seeing a trade go well into profit, waking up the next morning to see – that not only has the profit evaporated, but the trade has actually gone against you. Volatility in forex trading can be an absolute killer (not to mention greed) – so when profits are sitting on the table…..you’ve got to learn to take them.
Take the long JPY trades over the past 24 hours for example. I went short CAD/JPY (so…looking for JPY to gain strength against CAD) and caught a 100 pip move over a 4 hour period. That’s what I call a really nice trade.
Seeing the “waterfall” type selling pressure in the pair, I knew from experience that this type of market behavior doesn’t “last forever” and would likely be followed with a bounce in the opposite direction. I exited the trade with a full 100 pips profit with absolutely no concern as to “what I might miss” in further downside movement – if I’d remained in the trade.
Here we are a full 24 hours later – and the pair has 100% completely retraced the entire 100 pips from yesterday.
You can never go wrong taking profits – never. As well, by keeping yourself relatively nimble you are also equipped to take additional trades or (such as in this case) re-enter the same trade at even better levels.
Learning to distinguish “when/where” to do this does take practice, but if you keep in mind that you are continually growing your account balance as well as limiting your exposure in the markets – taking profits often (very often) should become a regular part of your daily trading.
I rarely leave money sitting on the table – as there is always another trade. Take the money – call it a trade ( a good trade ) and get back out there with a little more gas in the tank.