#339: Where to Place Your Profit Target

 Podcast: Where to Place Your Profit Target In this video: 00:24 – Trading from Nelson, NZ 00:48 – We talk about stop losses but what about profit targets? 01:30 – What you should not do 02:10 – How do you know where to place your profit target? 04:14 – Trading the longer time frame charts 06:07 – Contact me for more details about how we can help you Do you know where you should be placing your profit target and why you should be placing your profit target at that level? Let's talk about that and more right now. Hey, traders. It's Andrew Mitchem here from The Forex Trading Coach with video and podcast number 339. Trading from Nelson, NZ Coming to you from Nelson in the South Island where we're just setting up here. I've got a webinar tonight for clients, and just setting up in a new property that we're moving into, and not quite there yet. We'll be here properly in a couple of months from now, but just getting things set up in the office here. Hence the change in the background and just the two screens, not four. We talk about stop losses but what about profit targets? So yeah, we want to talk about profit targets. We talk a lot about stop losses. And stop losses, of course, are very important, because without a stop loss you're not protecting your trade, and without knowing where you're putting your stop loss, you don't know the position size you need, the lot size you need to keep your risk equal. But also another very difficult part of trading is where to put your profit target and why, and how do you decide where to put your profit target? What determines that? Does it determine by the currency pair, the timeframe, the conditions at the time? What is it that you do to determine that? And you can't just sort of make it up on the go. You've got to have a bit of a plan about this. What you should not do And also, we talk a lot about high reward to risk trades, and it's very important that you don't just go, "I've got a 20 pip stop loss, so I need to put a 40 pip or a 60 pip profit target," simply because you hear me talk about you need a two or three to one reward to risk trade. It's important that you don't do that. Yes, you need high reward to risk out of your trade, but you need to also put your profit target at a level that's a sensible level for a reason for that trade at that time. And that might be different depending on the currency pair or the timeframe, market conditions, et cetera. So how do you know? How do you know where to place your profit target? So it's really important that we get this right, because, of course, it can make or break your trading performance. And the whole point of a profit target is is when the price gets there, the market closes you for a profit and you haven't got to be at your computer worrying about the trade being open and those type of things. So it's important that we do that. So, how do we approach that? Well, because we're technical traders, we're always looking at price action and we're looking at charts. It'd be very difficult as a news trader, I would imagine, to know exactly where to put your profit target, because it depends on the reaction of that news, things like that. Whereas technical traders, we've got a lot of things that's actually in our favour. We can see, let's say you're taking a buy trade, of where the price last bounced. For example, where's the next likely resistance level? But the approach that we take at The Forex Trading Coach is two-fold. So if we're trading, and we split our trading up. If we're trading one-hour charts and shorter, which, to be honest, personally I don't do a lot of, but if we were, we're looking at current market momentum,