Generally speaking, when you enter into the market you should have a predetermined amount of units. And when you exit that position, you should have left with the same amount of units you went in with. This keeps money management simple as well as it does not add additional risk to your existing trade. However, as we all know there are no hard rules to trading. And there most definitely is a way to further increase your profitability once you are in a trade. Some rules were just meant to be bent.

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Example #1

Let’s say you are in a trade. It has been predetermined that your stop loss will be set at 50 pips. As the trade develops you see that you are nearing a 50 pips in profit. You could just let this continue on to your 100-pip profit target you have set, or you can put yourself in a position to profit even more from this trade.

At 50 pips, you can move your current stop loss to even and then add another position of equal value. In doing so, you are maintaining the same amount of risk if your trade moves back to even as one position will have broke even, while the other would have been at a 50 pip loss.

Now if the position continues on to your profit target, you would have a 50% increase. Instead of profiting 100 pips, you would have now pocketed an additional 50 pips from the trade.

What was originally a risk reward of 1:2 is now 1:3. Not a bad deal!

Example #2

If you are like me, you want to win something from every trade. Every little bit helps and if I can take a piece here and there from the market I will. Let’s take the same trade again where you have a 50-pip stop loss and a 100 pip take profit. Price has moved 50 pips in your favor. You could close out 25% of your trade and move your stop to even. In doing so, you are locking in some profits. However, moving forward all profit gained will only be at 75%.

The advantage here however is that you are always gaining something from the market. How many times has price moved in your favor only to turn back on you? Wouldn’t it have been nice to take a bit for yourself while you had the chance?

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It is okay to become creative with taking profit once you have already developed a winning strategy and no longer need the title of “Newbie”. While the above two examples do compliment my existing trading methods, it will most likely have to be tweaked to fit your own trading technique.

The FX Trading Network has provided great recommendations for brokers who allow traders to adjust their current open positions. Having a flexible broker allows you to add more creativity into the trading process. In many ways Forex is as much of an art as it is a science.