Do you close your trades too soon?
As a trader, you may find it hard to know when it’s the right time to close your trades. You may let losses run too long or cut profits short. Have you ever experienced any of the following scenarios?
-Your trade is making a small profit but instead of letting it hit the target, you close it because you fear that the market will reverse and you will lose your profit.
-You have just entered the trade and the market goes against your position, towards the opposite direction. You worry that the loss will grow bigger and you close the trade.
Early exits are a common trading mistake that can be attributed to multiple factors, such as thinking errors and bias, or insufficient trading knowledge, planning and preparation. The number one reason that you might exit a trade too early is:
Planning is power, and the conventional wisdom that tells us we should be following a trading plan is right. But what does a trading plan consist of?
So how can you practically avoid early exits while at the same time managing your trading risk? The most obvious step to take is defining clear trading rules, as well as your rules for handling unexpected market conditions. But did you know that Fondex cTrader’s Advanced Risk Management tools for Take Profit and Stop Loss, may also help you plan your exits better?
Our Advanced Take Profit setting allows you to define up to 4 Take Profit levels to scale out of your positions gradually. What does that mean in simple terms? If you open a 0.5 lots position with a total profit target of 50 pips, you can close part the position at 20 pips profit, and then at 10 pips, etc. In this way, you don’t have to worry that you may lose the profit you made if the market reverses.
Besides Advanced Take Profit, our platform uses Advanced Stop-Loss: once you set it up, your Stop Loss will be automatically moved to a break-even level after the price has progressed a certain number of pips in your favour. Would you like to learn more about the multiple tools that you can use on Fondex cTrader as well as for its copy and automated trading functionalities? Open a trading account and see how it all works real-time!
Risk warning: CFDs are complex instruments and come with a high risk of losing money rapidly due to leverage. 67.72% of retail investor accounts lose money when trading CFDs with this provider. You should consider whether you understand how CFDs work and whether you can afford to take the high risk of losing your money.
Disclaimer: This material is considered a marketing communication and does not contain, and should not be construed as containing, investment advice or an investment recommendation or, an offer of or solicitation for any transactions in financial instruments.
