Many Forex traders lose so often in their trades that they can’t wait to close their trading positions the moment they turn profitable. It’s very tempting to want to immediately secure the profits of a winning position, even before your profit target is reached.
Unfortunately, trading this way will often get you into trouble. You may be able to secure a small winning trade now, but it’s not uncommon for your losing trades to overtake your small winnings and net you an overall loss.
So what can you do about this?
Allowing your profit target to get hit
Fear is a very natural human response to risk, and it is this fear that causes many traders to ignore their profit targets in order to lock in smaller winnings: They are afraid that the winning trade may soon turn around and end up becoming a losing one.
The first thing I have to say is that although fear is a very understandable emotion, you should still try to be disciplined in your trades. You’ve done your homework and analyzed the trade setup signals before entering into a trade. Your stop loss and profit targets have also been carefully calculated to reflect the acceptable risk-to-reward ratio that you’re willing to take. All the elements of a high-probability trade are in place when you made the trade, so why doubt yourself now?
If you’re really afraid that your winning trade may turn around, you can always shift your stop-loss level to your trade entry price. That way, you’ve at least made sure that you won’t lose any pips… you’ll only stand to gain!
To learn more, download my free 26-page guide here:
"Forex Trading Traps!"
Harold Hsu is the owner of http://ForexSystemProfits.com where he provides premium Forex trading information and resources.
