As to profit target I will change the phrase so that it does not confuse us. When
planning my trade I talk about a first profit target and not profit taking as I don’t have the
deal open yet. I will talk about profit target area as I don’t work to the exact pip. If the
price level which are say at 1.3000 is the profit target I have in mind when planning the
trade I never set my actual profit taking at 1.3000 as that is where the price sometimes
turn around and you miss the profit with 2 to 3 pips. I use an area 5-10 pips away to take
profit. If my estimate of profit is 30 pips I will never let a 25 pip gain become a loss. I
will close 40%-50% on 25 pips gain and then either set the remainder on breakeven or
use the 25 pip gain to set the stoploss on the remainder to 25 so that when that is hit I will
break even on total. I will only do the latter if I am convinced that there is potential for
further moves otherwise I cash in 40-50% and set the rest at breakeven. There are so
many deals coming that by taking partial profits and the rest is taken out at breakeven you
can manage 100+ pips a month just on the partial profits made.
When the setup does not look like the perfect setup one must know that it can go
wrong so take early profits and make sure that the worst should be breakeven or a very
minor loss. That is part of money management.
The setup to the EurUsd you people took was not a wrong decision. It wasn’t the
perfect round top. I wasn’t live at that stage so I also might have taken it although I did
not like the looks of it. I was however very aware of a shooting star that goes beyond the
trendline as we are on strong resistance area as you have also stated. They know the short
deals are in and the stops is above the trendline. Just look at history and see how many
times at resistance/support you get a penetration of that. There is two set of stops taken
out. The ones that went short and the ones that put in orders for the breakout trade. So by
piercing the trendline they trigger the breakout orders and tak