I do plow profits from prev. trades into the next trade if liquidating 100% instead of a fraction of my position.
Alternatively you could:
1. Exit 100% at +13: 13 / 1 = 13 pip stop on next trade.
Re enter with a full position on your next trade.
2. Exit 100% at +13: 13/ 0.67 = 19.4 SL on next trade.
Re enter with 2/3 of a position on your next trade.
3. Exit 100% at +5: 5 / 0.5 = 10 pip SL on next trade.
We only took a 5 pip profit so we enter a half position on next
trade so that we can use a decent SL.
3. Exit 100% at +5: 5 / 0.33 = 15.1 pip SL on next trade.
Some times you might feel like re entering with 1/3 a position instead of re entering a full with a 14 pip SL (5 + prev9 pip SL) or doing some thing crazy like entering with a 5p SL.
The only problem with exiting 100% of your position is a surprise move for 40-70 pips while you are waiting on the side lines (total bummer
If your plan is to use a SL around or equal to your initial SL then you would want to exit half or more of your position and either keep your SL the same or adjust it lower/higher at your leisure.
Just because you make a profit on THIS TRADE that does not mean that you have to continue trading THIS MOVE.
If you feel tired or you are low on beer
then you can use the profit from the prev. trade 4+ hours later when you start trading again.
I remember when you first introduced this comcept and I think that some of us could not figure it out as were werent thinking of in terms of divisible positions, so some of us were plowing profit from "previous trades" into current trades.
OK maybe just i was thinking like that.
MightyOne wrote:You go long 1 unit which is divisible by 3 w/ a 9 pip (0.9%) sl and take profit of 1/3 of your position at 13 pips.
One unit made 13 pips of unrealized profit and 67% of one unit remains to retrace 13 "steps" the size of which are one unit.
There for price has to retrace 19.4 "steps" to reach break even
(13 / 0.67).
You go long 1 unit which is divisible by 2 w/ a 9 pip (0.9%) sl and take profit of 1/3 of your position at 13 pips.
One unit made 13 pips of unrealized profit and 50% of 1 unit remains to retrace 13 steps the size of which are one unit.
Price has to retrace 26 pips to reach break even (13 / 0.5)
I should have said Profit / %PositionHeld - Profit = StoplossDistanceFromEntry = Break Even