Managing my profitable position

[nd713]

Hello all I’ve been trading on and off for about 6 months. I haven’t had great success profit wise but believe that I am on the road to success thanks to hard lessons (unfortunately the learning curve does involve loosing) and immersing myself in heaps of fx material and general trading material (like to give thanks to trade2win and their members for the abundance of educational material and experience available). I’ve moved away from simply judging success by profits but instead have begun judging success according to my adherence to my trading plan and ability to with stand negative emotions (one of the worst enemies of all traders!!!!!!!). I’m at university in my 2nd year doing financial economics and I plan one day after graduation to be a great trader.

Anyways let me get to the question at hand. EUR/GBP being one of the majors I trade I chose to go long early in the week at 0.9000 trading with two mini lots and a 20 pip stop with my first target being 0.9040 and second 0.9070. First target was met so I closed 1 lot and moved my position 2 break even. I saw the position reverse to within 10 pips of my stop the next day but it shot back up to hit my second target of 70 pips. A good profit for a mini account that is £1200 in size. More so a success because I stuck to my guns and didn’t sell my whole position at my first target due to this niggling fear that short term bearish technical’s would prevent my 2nd target from being met.
That was wed/thurs trade come Friday morning EUR/GBP tested the 0.9000 level once again. I was very unconvinced by GBP strength on this downward move as it seemed to be over bought amongst other signs. I entered once again with two lots this time with my stop below the cluster support of 23rd and 24th September. With my 1st target at 0.9070 and second at 0.9100. And to the greatest luck in the world we all know what happened Friday morning; GBP collapsed across the board!!!. So know I’ve seen Euro break all resistances including the 0.9205 resistance. And I am in a very profitable trade one that is currently nearly 40% the size of my whole account. And I do not wish to handle the trade like an amature but instead like a pro. I normally sell half my position on gaining my first target and move my stop to capture a bit of profit and then trail but all my trades are very short term and I think I should wisely hang onto this trade for a while.
So what risk management would the more professional traders employ in this situation and for how long would you recommend holding this one. I haven’t closed any of my lots and chose to keep both open in order to maximise profits. Instead I have moved my stop to 0.9070; my initial 2nd target which provides me with a worst case scenario that i am content with. The stop at 9.070 is also protected by the view that any downward correction will be capped at 0.9140/0.9100 support. I’m hoping for a strong week leading up to the nov 4th mpc meeting. With yesterdays break above 0.9205 to reach a high of 0.9218, I feel there is plenty of room on the upside this week, in the longer term, looking at the daily and weekly charts i think this bounce may just be the resumption of the rally from 8.399. In the shorter term however i am aiming for a retest of 0.9400 and to close my first lot around 0.9300 resistance. Nothings ever guaranteed in the markets so all I can do is have a story, be the best risk manager possible and hope for the best. It feels absolutely wonderful when you are in a winner. All advice is welcome. Thanks a million :smart:

 

[tomorton]

I wouldn't want to advise on the specifics of someone else's trade - too many factors apply. But a generic rule I apply is to continually review where price has now reached on open positions - if I wasn't in already, would I enter here? If not, I usually take the profit and exit. Continuing price movement depends on new players taking another position parallel but later than yours - if you wouldn't do that, why should they?

You wisely mention being the best risk manager possible. Professional. Winning the game comes from staying in it long enough. The only way to definitely not win is to run excessive risks and get knocked out.

 

[everyonerich]

hi.. i think youre doing great looking at the daily + 4h

gbp falling because Prelim GDP was -0.4%

this is just my view, i dont really look at eur/gbp thou.. probably resistance at 61.8 fib

 

[nd713]

Thanks for the insights. a break of the 61.8 fib level I think would depend on how the market continues to react to the poor gdp figures early Monday morning in the Asian and the European sessions if it breaks here the door way could open for further advance. Was Friday an overreaction or is there more selling to come? Time will tell.
Other factors put aside I can’t help but notice the poor performance against other majors, namely usd where major supports were broken. Downside momentum seems to be very strong. There isn’t much news out from the UK till Thursday and the markets could move alot in the few days till some good figures might stabilize GBP. However speculation is just that; speculation. And I am more than aware that a pair can bounce both ways successively and we have seen alot of that this year. A little comment by a person of significance could change alot of things for better or for worse. Tomorton thanks for the advice on holding onto a position. Would I enter the market now? Indeed the fundamentals are all for further decline and so do the technical’s point to this notion, however the question I think everyone will be asking before entry is "timing." I would probably wait for some sort of pullback before I entered this trade, to ensure optimum entry. As I stand I feel I have placed a fairly disciplined stop that should weather any storm and keep me in if there is future up movement. I’ve decided to trade my whole two lots as far as I can take them. I won’t be splitting them as i’ve always wished to be right at the beginning of a massive move and I think I might have got my luck (fingers crossed) cheers for the insights and I wish you all a good Monday. One more thing those who trade other GBP crosses are you favouring further decline?

 

[fayalac]

As Tomorton told you, it is hard to give a specific opinion about someone else´s method.
You mentioned two things luck and risk management. Most of us have had sometime a good lucky movement on the markets, but let me tell you these, try not to rest on luck. Risk management, i agree that the most profitable trades are sometimes those on which you stay longer instead taking "fast profit", i can tell you these depends entirely on your method, your personality and your personal definition of profit (time, amount, etc.).
Regarding a specific movement on the market. Markets behave randomly but those can be predicted with some degree of acuracy, in these point i can tell you "if you follow the stats...you will get to where they aim", that is the direction of profit, in other words the trend is your friend.
Some pros use price-action method to trade, most of them claim that they need no stats, indicators or whatever. You always need statistics, follow stats, personally i could recomend you to study price-action method, it is a powerfull tool that can be used, with some indicators, to predict market movements, you can anticipate with enough time to make "very good profit in very short time", again, it depends on your personal definition.
You said you feel protected by supports, remember supports and resistances are simply an average of the markets behavior into a given period of time, when you have a ranging market your confidence is correct, when not, take care.
And dont feel bad for looses, most of us have lost money at our beggining, even having from some to several years of trading experience and with experience at specific pairs we can loose money, we can make a mistake or simply an important event took place while you were serving a cup of coffee, what matters here is to learn when to take a loss, to have the ability to identify a bad entrance and to get out, loss is part of these bussiness.
Good luck to you.

 

[everyonerich]

i suggest never really put too much expectation, however every trader is actually trading their own belief systems. no one can really tells you where is the exact market would go.. just dont overtrade and you'll stay in this business.