Taking profit is the reward of your successful trade. There are a few things you can do to maximize your returns.
Recall that part of your initial trade plan was to determine what the profit point would be. You did your research to determine the likely obstacles along the way and then decided at what price point you would be taking profit. Now that your target is in sight, you have some decisions to make.
To be true to your system, you should close your trade when you reach your goal... but there may be potential for additional profits in your trade. That very support or resistance (S/R) level that you identified as an exit point, is also used by other traders and is often the target of "stop hunters".
Stop Hunters May Help Push Your Profits
Often the big players in Forex will go "stop hunting". As your Forex training showed you, typically traders will place their stop loss orders behind significant S/R levels. There is always a "buzz" of information and rumors surrounding the currency market and often this rumor mill will talk of drives by the big players for stops.
If your trade is nearing its destination, but there is a lot of talk of stop hunting, consider closing only a portion of your position which will leave some of it out there for possible bonus profits. If the chase is successful and the price does penetrate the S/R level, new targets open up as once resistance level is breached, it usually becomes the new support level (vice versa for support levels).
Technical Indicators Offer a Second Opinion
You can also use technical indicators to help indicate market sentiment. Indicators such as Relative Strength Index (RSI) give clues about market strength. If RSI is indicating a change may be brewing and you are near your target, take the money and run. No one will ever think badly of you for taking profit by following your plan and exiting when you intended... that is the sign of a winning trader's mentality.
However, if RSI is not reaching one of its extremes, there is a chance you may enjoy additional profits if you allow a portion of your position to ride.
