The day trader opens and closes all his trades when the market is open during the trading period and does not hold positions overnight. Day trader usually use 1- minute to 15- minute charts.
Why would the partial close method be popular among the day traders?
Partial close method allows for short term trading and also the benefits of riding on longer term trends and profiting from them. This is how it is done:
Entering a trade with multiple contracts that provide the freedom to take a portion of the positions off when a predetermined price is reached based on market structure and short-term behaviour, allowing for the balance to profit in the short run and also capitalising on longer-term market behaviour.
Trading multiple contracts is one of the most misunderstood trading concept. When trading multiple contracts, there is a tendency for traders to take on excessive risk. Multiple contracts allow forex traders to cover part of his position and exit a portion of his contracts at pre-defined take profit level. Next, he will shift his initial stop loss to entry price.
The beauty about using partial close method is when market suddenly stop him out of the trade by hitting his stop loss, he would still make a profit. If his stop loss is never triggered, he will enjoy the rest of the trade participating in the trend for as long as it lasts with no risk, knowing that no matter what happens at the very least he has already bank in a small profit.
It is very important to only trade which 1-2% risk per trade or 5% maximum risk per day. Sound money management is what keeps the professional traders from making money consistently in the long term. Protect your investment equity like you would protect yourself from hazards.
Partial Close Example
Trading Eur/Usd as example, your account size is $25,000 and you choose to risk 2 percent on this trade. Two percent of $25,000 is $500. Your trade entry is buy Eur/Usd at $1.2300, and your stop loss is placed 50 pips away from entry price $1.2250. You will trade with 1.00 (1 standard lot or
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