It isn't easy to trade forex manually, says Warren Seah on CountingPips.com, but if you want to really be successful, using the partial close ea will help you expand your trading capabilities.
Forex traders make use of partial close ea in the scaling out of their trade positions based on profit levels that had been fixed prior to the start of trading. This is how the ea works: Once the market trading price gets to a stipulated take profit level, the trader would collect his initial profit by exiting a proportion of the total contract. The trader can then proceed to move the stop loss to the entry price in order to ensure that no matter what happens to the market trend, a loss will not be incurred.
Partial close ea is very easy to manage since they are only concerned with taking out part of a contract while letting the remaining positions to ride the trend till it dies out. The ea ensures that the worst case scenario that could result is a no-win and no-loss situation whenever there is trend exhaustion and the stop-loss level is hit at the breakeven level. This is termed pip protection mechanism.
Partial close ea is particularly good for day trading or short-term trading. It is very easy to take up several contracts in such a setting; part of which could be taken off the market once profit has been realized as determined by the short-term market behavior and market structure.
Longer-term market behavior also makes for a balance. A trader can trade on the short-term and also benefit from longer-term trend riding as well as its accompanying profit. But there is also the danger of a trader exposing himself to too much risk by trading several contracts. Caution is advised in terms of practicing money management by not risking more than 2% per trade and not more than 5% per day or month. The efforts that professional traders put in the management of their equity is what keeps them going on in forex trading; without the management of equity, most of them would have retired from the market a long time ago.
More advanced exit strategies will have partial close method incorporated with trailing stop strategies for the management of trades and it also spells out the price level at which portions of a contract can be exited. In short, partial-close strategies serve as guide to a trader on how best to approach his trade for him to be successful.
It would be so much easier to have more winning trades and to make more profit when the partial close method is used in exiting a trade. Partial close ea is also capable of helping traders leverage from the behavior of the market in the short-term and the longer-term. Prior specification of trade exit strategies helps to eliminate emotional indecisions that could ruin a trade. The proper use of the ea helps a trader in his quest to be successful in trading.
By Warren Seah, Contributor, CountingPips.com