I know that a lot of you guys are very unsure when it comes to taking profits in your trading. Therefore I write this post to share with you how I set my target profit for each trade on a live chart. I hope that this will give you a better understanding on how to do it.
If you have read my FHEMA strategy post last week, you will know that the GBPUSD has hit the target profit of 50 pips. Therefore I will like to use that example to show you how I set my target profit.
If you take a look at the picture below, it will show you where I enter the trade.
You can see that shortly after I exit my trade, the price started to reversed up. How did I know that?
If you take a look at the 4 hourly chart below, you can see that the point which I exit my trade is where the strong support is.
From this picture above, I hope that you understand how I set my target profit for each trade.
When I enter my trade on the 15 minutes chart, I will then use the support and resistance that I have taken from the higher time frame when I do my top down analysis to set as target profits
If you have read my previous post (Live Chart Tutorial 3) where I talks about the top down analysis on the chart. Finding the major support and resistance on the higher time frame is what we are going to use as target profit of our trades.
Now you can see the link between doing a top down analysis on our chart everyday and using what we found there to set our target profit.
If you are interested in learning my forex strategy, you can take a look at the link below