Thread: Profit Taking with limit orders

Hi,

sorry if this is a repeat question but i want to know how i can take profits with limit
orders. Say i go long 5 lots @ 1.3000 and want to take break even profit by selling 2
lots at 1.5000, but remain in the trade with the other 3 lots, how can i do this?
currently it seems that limit orders will execute on all of your positions and that you can not specify partial execution, or am i missing something?
Thanks!

Hi radyn,

Welcome to the Micro Forum! Allow me to help you with your question.


How can I close out partial positions with Limit Orders?

On your UK based account, I would recommend opening up your position in multiple tickets. For example, instead of buying 5 lots of EUR/USD at one time, buy 2 lots followed by buying another 3 lots. You will then have two separate tickets that you can set two separate Stops and Limits for. It will look like the image below once you are complete:

Are you already trading on a live account? Have you found a strategy that you are comfortable trading? Let me know if I can help you out in any way. I would be more than happy to.


Thank you for your post!

Rob
rob@fxcm.com

Originally Posted by radyn

Hi,

sorry if this is a repeat question but i want to know how i can take profits with limit
orders. Say i go long 5 lots @ 1.3000 and want to take break even profit by selling 2
lots at 1.5000, but remain in the trade with the other 3 lots, how can i do this?
currently it seems that limit orders will execute on all of your positions and that you can not specify partial execution, or am i missing something?
Thanks!

Hi Rob,

Thanks for the reply! it just seems that there is room for error and slippage in a fast market
if this is the only way (although only +- 3 pips in your example). Guess it won't be too much
of an issue if you use entry orders.

I have a live account but am still just getting to know TS ii on a demo account. Using a custom
strategy that is also still just a beta. i currently trade stock etc and am new to forex, but so
far i am finding it a lot more appealing!!

Thanks again for the reply, will mail you if i have anymore queries.

Hi radyn,

Thanks for your reply!


How can I prevent slippage in a fast market?

Stop Entry Orders do have a risk of slippage if the market moves quickly through your order. This is the nature of trading in any type of instruments. Specifically in FX however, there are certain times when volatility can be predicted and in many cases avoided.

DailyFX Economic Calendar

All of the High Importance news events listed at the above link will result in market volatility. If you do not want to be susceptible to this volatility, you could keep track of when these economic figures are set to be released and make sure you are "flat" (no open trades) before the announcement is made. Then of course, after the announcement, the trades could be re-entered.

If you are worried about market gapping through your stop, than you may want to considering closing out your positions before the weekend. Let me tell you why. FXCM's trading closes on Friday at 4pm New York and re-opens on Sunday 5:15 New York. If the Sunday opening price has gapped through your stop, your position will be closed at the opening price. Closing your positions on Friday will reduce the risk of slippage that could occur when there is a weekend gap in prices.


Any recommendations for a trading using a Beta Custom Strategy?

That sounds very interesting, radyn, and I wish you luck! Is this an automated system (robot trading) or is a manual system where you place trades manually yourself? If it is not automated, would you be interested in learning more about FXCM's Programming Services that could automate your strategy for you? You can contact them at consulting@fxcm.com to learn more about what they can offer you.

Look forward to hearing from you!


Rob

Originally Posted by radyn

Hi Rob,

Thanks for the reply! it just seems that there is room for error and slippage in a fast market
if this is the only way (although only +- 3 pips in your example). Guess it won't be too much
of an issue if you use entry orders.

I have a live account but am still just getting to know TS ii on a demo account. Using a custom
strategy that is also still just a beta. i currently trade stock etc and am new to forex, but so
far i am finding it a lot more appealing!!

Thanks again for the reply, will mail you if i have anymore queries.

Originally Posted by Rob at FXCM

Hi radyn,

Welcome to the Micro Forum! Allow me to help you with your question.


How can I close out partial positions with Limit Orders?

On your UK based account, I would recommend opening up your position in multiple tickets. For example, instead of buying 5 lots of EUR/USD at one time, buy 2 lots followed by buying another 3 lots. You will then have two separate tickets that you can set two separate Stops and Limits for. It will look like the image below once you are complete:

Are you already trading on a live account? Have you found a strategy that you are comfortable trading? Let me know if I can help you out in any way. I would be more than happy to.


Thank you for your post!

Rob
rob@fxcm.com

Hello Moderators please address if this would apply to US accounts who want to set up multiple profit limits on the same currency pair?

Does the FIFO rules prevent this for US?

What I'm trying to do is set limits like how Gregory Mcleod FXCM analyst does where one profit limit is 1 to 1 second limit is 1 to 2 and so on so that risk can be spread more.

Hello sman1109, and thank you for your post!


I have an FXCM LLC (US) account. How do I set a stop/limit to partially close a position?

You can partially close positions by adding multiple stop/limit orders when creating trades. Adding stops/limits when creating trades allows you the flexibility to scale out of positions.

If you want to have different stops/limits to partially close positions, then you can create multiple trades.

For example, let’s say we are going to buy 150k EUR/USD at market and we want to have 2 different stop loss orders – a 100k stop at 1.4000 and a 50k stop at 1.4050. To create stop/limit orders to partially close the total 150k exposure, the trader would place 2 separate market orders:

• Trade 1: Buy 100K EUR/USD at 1.4100 with a stop at 1.4000.
• Trade 2: Buy 50K EUR/USD at 1.4100 with a stop at 1.4050.

Please note, stops and limits attach to your net (total) positions. Even though you create stops and limits when creating individual orders, stops and limits cannot be attached directly to individual positions.


What will happen when I partially close a position?

Let’s look at an example that takes advantage of the new stop/limit functionality by placing two trades, ticket 1, placed first, and ticket 2, placed second.

• Trade 1: Buy 100K EUR/USD at market with a stop at 1.4000.
• Trade 2: Buy 50K EUR/USD at market with a stop at 1.4050.

Since our stops and limits attach to the net positions, the Summary Window shows our total exposure:

The stop/limit orders will display in the Orders Window, totaling 150k if you add up both waiting stop and limits:

Let’s close out 60k of the net positions with a market order. The net positions will reduce from 150k down to 90k.

After 60k of our 150k net positions is closed, the 100k stop/limit order automatically updates to 90k and matches the net positions in the Summary Window. Something you will notice is that the sum of waiting stops/limits in the Orders Window, totaling 140k, is greater than the net positions of 90k.

Why do my waiting stops/limits total to more than my open net positions?

Waiting stops/limits can total to more than net positions because they are attached to your net positions, not to individual trades. For this reason, as you change your open exposure, your stops and limits will update so that each individual stop/limit is equal to or less than the total of net positions.

Stops and limits only reduce net positions and will never add to your net positions (will never create new trades).

If all net positions are closed for a specific currency pair, then all waiting stops or limits on that currency pair are automatically removed.


What type of accounts does FIFO execution apply to?

As of August 1st 2009 the National Futures Association (NFA) applied new regulations which require U.S. regulated Forex Dealer Members to abide by First in First Out (FIFO) execution. For that reason all FXCM LLC (US) accounts utilize FIFO execution. This includes both standard and micro accounts. Compliance Rule 2-43(b)

FIFO requires that when multiple positions are held in the same currency pair, the position which was first opened will be the first to be closed.

The NFA’s stance is that FIFO provides more transparency to customers by offering a more accurate picture of the P/L than viewing the results of individual positions. This brings the forex market more in line with the practices of the futures and equities markets.

Please click here for more information regarding FIFO execution. My colleague Rob at FXCM has created a great thread in the forum that will help you acclimate yourself to FIFO execution on the platform. This thread can by found by clicking on the link below:

(FXCM LLC FIFO FAQ)FXCM LLC FIFO FAQ

Is there any way that I can bypass FIFO execution?

FXCM LTD (UK) accounts utilize ticket by ticket (NON-FIFO) execution, therefore with an FXCM LTD (UK) account positions can be closed in any order. New Commodity Future Trading Commission (CFTC) regulations (FAQs about the new CFTC rules) (as per Dodd Frank Act) prohibit US residents from trading Forex with a counterparty that is not regulated in the US. For that reason it is required for clients residing in the United States that would like to trade forex and do business with us to open an account with our FXCM LLC (US) entity. Please click here for more information.

If you can provide proof of residence outside of the United States then you can transfer your account to an FXCM LTD (UK) account.

Please click here (FXCM LTD (UK) vs. FXCM LLC (US)) for more information regarding the differences between an FXCM LLC (US) and FXCM LTD (UK) account.

Please click here to transfer your standard account to an FXCM LTD (UK) account.

Please click here to transfer your micro account to an FXCM LTD (UK) account.


Remember proof of residence will be requested upon submitting a new application or the transfer form.


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FXCM LLC (US) | FXCM LTD (UK) (Spread Betting Live Walkthrough)

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Thank you again for your post sman1109! Please feel free to post with additional questions or contact me directly at julius@fxcm.com

Originally Posted by sman1109

Hello Moderators please address if this would apply to US accounts who want to set up multiple profit limits on the same currency pair?

Does the FIFO rules prevent this for US?

What I'm trying to do is set limits like how Gregory Mcleod FXCM analyst does where one profit limit is 1 to 1 second limit is 1 to 2 and so on so that risk can be spread more.