This is a post by ForexSTF

There are 1 or 2 currency exchange strategies you can use to raise your profits, irrespective of what currency trading system you may be using. Here is one easy trick that can help you to make more out of each successful trade.

Of course, all traders know that you need to set a limit order or at a minimum include a good profit target or closing signal in your intention and keep to it. It is very important not to keep a winning trade open till the moment ‘feels right’. Either you are aiming at a certain number of pips or you are waiting for something similar to an oversold or overbought signal and then close right away.

Keeping a trade open for an undefined time, expecting to make the most of it and profit from each last pip, is a road to spoil. Successful forex trading strategies are never based mostly on feeling. Sure it is annoying to shut out a trade at 50 pips and then see the trend continue to 200, but how frequently does that happen? We tend to remember trades like that and forget the others, so if you don’t keep a record of what happened after you closed a trade, now is the time to start.

If it seems to be true then you might want to back test the result of increasing your profit aim per trade, but in 90% of cases you will find that this does not happen regularly enough to make a case for that. What you might find , however, is it’s worth closing half of your position.

Of course, to do this you should either be trading more than one lot or have a broker that accepts fractional lots. You can set a limit order for the 1st half but you have to be watching the market so that at that point, you can set a new limit order for the second half and at the same time, move your stop-loss. The new limit order could be 1/2 your original profit target or it might be an identical quantity again, but not more.

There are several options for the positioning of the new stop and it’s a good idea to back test these for your particular system. First option, if your stop was originally 20 pips out from your opening position, it now moves to 20 pips from the price at which you simply closed half the order.

2nd option, your stop moves to your entry position and or minus the spread. So if the trend now turns on you, you will have a reasonable profit on the 1st half of your trade and break even on the second half. 3rd option, the stop moves to 1/2 way between the opening price and the prevailing cost. What’s best depends on the original position of your stop. Of course you don’t want to move it so near to the current price that it’s triggered too fast.

Equally, never be tempted to apply this method to a loss-making trade. It might be a big mistake to only close half of a trade when it hit your stop, unless you are testing different positions for the stop. Currency exchange techniques should maximize your profits, not your losses!