Recently, I wrote about trading exits and how many people can easily enter a trade but have no idea when to exit

their trade.

There is so many things wrong with entering a trade without a plan one of which is you will have little to no plan

for money management.

Without managing risk and your trading account, your presence in the

market will be short lived.

You have two exits when you are in a trade:

Profit exit. Protective stop exit. With a protective stop, you are able to

say "I will only risk 2 points" on the trade" and barring slippage, that will be your maximum loss on this trade.

While you can aim for 2 points or any other target for a profit exit, the

market is what will dictate your profit.

The best you can do with exits for trading profits is trail to take

advantage of extended moves, profit targets to assist you with a favorable

risk/reward scenario, scale out partial, and/or monitor when the move is

losing steam. The question is what is right for you?

Some people have an easier time in a trade once they take off a portion and get paid for the trade. Others will use

market cycles/rhythm/structure to pinpoint places the market may either

stall or turn against the position.

There are those who can read price very well and will exit if price is

showing it's starting to run on empty in the direction of the trade.

There are many ways to take your profits and although you will hear the plus and minus for all of them, at the end of the day it all depends on what

serves you.

I want to take a look at a few ways to take profits on trades that I and many I

know have used over the course of their trading careers. The first one is

using a simple trend line.

I say simple however like many things in trading, you want to quantify a way to draw and update trend lines so you can be consistent over the course of

many trades.

This is an actual entry that took place a few months ago in the Forex market. It's beyond the scope of this article however it is simply a confluence of

several factors (the setup) and gearing down to a lower time frame for timing

the entry (trigger).

We are going to use a trend line break to let us know that the move higher

may be over. We are not looking for a slice through the line however we are

looking for a solid break of the line.

We will adjust the line when price puts in a lower obvious swing and breaks

the previous high.

So I can add a trend line as shown here on the chart which if price rockets

down from the peak of 226 pips, I will end up with perhaps 40 pips on the

trade.

This is one reason many people scale out partial profits. It can be extremely difficult watching price retrace and eat up all the unclaimed profits the trade

gave you.

Things have now changed in regards to the trend line. As you can now see, price had a healthy pullback to the

area price broke out of. It then made a new high which now allows a more aggressive trend line. Now, if price

decides to push through the trend line, you can bank over 100 pips.

Now we are seeing price make highs but then pull right back into the yellow

range box. While there is one area that price made a new high, it was done inside the range and it is not

"obvious".

I'd negate it and although it will signal the break earlier, we would still wait to see if it was a true break and not just a

run.

Here we have used a different low and I also have added an aggressive line in

red. You may want to use these aggressive lines after a parabolic push

in price. You can see how price smashed through the regular trend

line.

The red line while it did break, price did not make an aggressive move

down.

That's fine because as you can see, after price broke the red line, it made little attempt to test the backside of the line. You'd probably place your stop at the bottom of those small

candles that occurred before the big push through.

This is a nice and simple rules based exit strategy that takes advantage of

the trend until you can objectively see that it has broken. Will you leave

profits on the table? Sure you will and that is just something you are going to

have to learn is all part of the game.

Go through some past trades and see if you can identify where you would

have exited if using a trend line based target method.

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