Profit fixation
Profit fixation
There are three main profit-taking strategies:
1. Fixed RR (1:2, 1:3RR).
2. High RR (1:10RR and above).
3. Partial profit taking.
Fixed RR.
When trading with a fixed RR, the trader ignores the situation on the chart and places a take profit at the level of 1:1, 1:2, 1:3, taking into account the commission. This approach has a high win rate and also relieves the trader from feeling greedy. You do not need to select targets, accompany the position and worry about a random factor that the price may react to. We think that many people are familiar with the situation when the take is put on a lay, the price reaches 1:5R without removing the minimum, and then hits the stop.
The weak side of the strategy is that it has limited profit potential. Often when trading with the trend, you can get more than 2 or 3%.
High RR.
According to this strategy, a position is opened on a lower timeframe, and targets are allocated on a higher timeframe in order to set a short stop and a long target. On the other hand, this does not prevent you from using a fixed take profit level.A. At one time, Liquidity traded high RR and set a take at the level of 1:10, regardless of the targets on the chart.
Many in this strategy are captivated by mathematics. With a risk-reward level of 1:10, a win rate of 10%-20% or 1-2 profitable trades over a distance of 10 positions is enough not to be unprofitable.
And yet, this strategy can harm the trader. If the price does not reach the marked targets, you will not make a profit even if you did everything right. This puts a lot of pressure psychologically, especially when it was possible to take 3-5% and close the position in plus.
You may get the impression that there are only two extremes: earning rarely, but a lot, or little, but often. But there is another strategy that helps to balance and find a happy medium.
Partial profit taking.
The trader fixes the profit in parts as the selected goals are achieved. Targets can be determined both by schedule and by risk-reward ratio. For example, you fix 50% of the position at 1:3, 25% at 1:5 and 2 more5% at 1:10. Either 50% on FTA and the rest on potential reversal zones.
This strategy will help you capitalize on your trading ideas, reducing the risk of losing profit when the price falls short of the marked targets.
Partial fixation will be useful for novice traders because it creates a positive experience and demonstrates what you are capable of.
Do not jump from extremes to extremes and look for balance.
Hope you enjoyed the content I created, You can support with your likes and comments this idea so more people can watch!
✅Disclaimer: Please be aware of the risks involved in trading. This idea was made for educational purposes only not for financial Investment Purposes.
---
• Look at my ideas about interesting altcoins in the related section down below ↓
• For more ideas please hit "Like" and "Follow"!
There are three main profit-taking strategies:
1. Fixed RR (1:2, 1:3RR).
2. High RR (1:10RR and above).
3. Partial profit taking.
Fixed RR.
When trading with a fixed RR, the trader ignores the situation on the chart and places a take profit at the level of 1:1, 1:2, 1:3, taking into account the commission. This approach has a high win rate and also relieves the trader from feeling greedy. You do not need to select targets, accompany the position and worry about a random factor that the price may react to. We think that many people are familiar with the situation when the take is put on a lay, the price reaches 1:5R without removing the minimum, and then hits the stop.
The weak side of the strategy is that it has limited profit potential. Often when trading with the trend, you can get more than 2 or 3%.
High RR.
According to this strategy, a position is opened on a lower timeframe, and targets are allocated on a higher timeframe in order to set a short stop and a long target. On the other hand, this does not prevent you from using a fixed take profit level.A. At one time, Liquidity traded high RR and set a take at the level of 1:10, regardless of the targets on the chart.
Many in this strategy are captivated by mathematics. With a risk-reward level of 1:10, a win rate of 10%-20% or 1-2 profitable trades over a distance of 10 positions is enough not to be unprofitable.
And yet, this strategy can harm the trader. If the price does not reach the marked targets, you will not make a profit even if you did everything right. This puts a lot of pressure psychologically, especially when it was possible to take 3-5% and close the position in plus.
You may get the impression that there are only two extremes: earning rarely, but a lot, or little, but often. But there is another strategy that helps to balance and find a happy medium.
Partial profit taking.
The trader fixes the profit in parts as the selected goals are achieved. Targets can be determined both by schedule and by risk-reward ratio. For example, you fix 50% of the position at 1:3, 25% at 1:5 and 2 more5% at 1:10. Either 50% on FTA and the rest on potential reversal zones.
This strategy will help you capitalize on your trading ideas, reducing the risk of losing profit when the price falls short of the marked targets.
Partial fixation will be useful for novice traders because it creates a positive experience and demonstrates what you are capable of.
Do not jump from extremes to extremes and look for balance.
Hope you enjoyed the content I created, You can support with your likes and comments this idea so more people can watch!
✅Disclaimer: Please be aware of the risks involved in trading. This idea was made for educational purposes only not for financial Investment Purposes.
---
• Look at my ideas about interesting altcoins in the related section down below ↓
• For more ideas please hit "Like" and "Follow"!
🔥Indicators Set - t.me/crypto4light/2155
✅Youtube- youtube.com/crypto4light
💰Join in tg channel - t.me/crypto4light
🐦Follow on Twitter - twitter.com/vladi4light
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✅Youtube- youtube.com/crypto4light
💰Join in tg channel - t.me/crypto4light
🐦Follow on Twitter - twitter.com/vladi4light
📊Max Discounts lnk.bio/discount4light
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