Forex trading is a popular way to make money online, but it can be challenging for beginners. One of the most important things to learn when trading forex is how to close out a partial trade. This process is essential because it allows you to take profits or minimize losses. In this article, we will explain how to close out a partial forex trade.
What is a partial forex trade?
Before we dive into the process of closing out a partial forex trade, it’s important to understand what a partial trade is. A partial trade is when you close out a portion of your initial trade while leaving the remaining portion open.
For example, let’s say you bought 1 lot of EUR/USD at 1.1200. The market moves in your favor, and the price goes up to 1.1300. You decide to close out half of your trade, which is 0.5 lots, to take some profits. You still have the other half of the trade open.
Closing out a partial forex trade
Now that you understand what a partial trade is let’s dive into the process of closing it out. There are two ways to close out a partial forex trade: manually or automatically.
Manually closing out a partial forex trade
To manually close out a partial forex trade, you need to follow these steps:
Step 1. Open the trade tab
The first step is to locate the trade that you want to close out in your trading platform. You can typically find this in the trade tab or the order book.
Step 2. Select the trade
Once you have located the trade, select it by clicking on it. This will bring up the trade details, including the trade size, entry price, and current price.
Step 3. Choose the partial trade option
Most trading platforms will offer you the option to close out a partial trade. Look for the “partial” option and select it. This will allow you to choose the amount of the trade that you want to close out.
Step 4. Specify the amount
After selecting the partial option, you need to specify the amount of the trade that you want to close out. This can be done by entering the size of the trade that you want to close out or by using the slider to adjust the size.
Step 5. Confirm the trade
Once you have specified the amount of the trade that you want to close out, you need to confirm the trade. This will initiate the process of closing out the partial trade.
Automatically closing out a partial forex trade
Some trading platforms offer the option to automatically close out a partial trade when it reaches a certain level of profit or loss. This is called a “take profit” or “stop loss” order.
To set up a take profit or stop loss order, follow these steps:
Step 1. Open the trade tab
The first step is to locate the trade that you want to set up a take profit or stop loss order for.
Step 2. Select the trade
Once you have located the trade, select it by clicking on it. This will bring up the trade details, including the trade size, entry price, and current price.
Step 3. Set up the take profit or stop loss order
Look for the “take profit” or “stop loss” option and select it. This will allow you to choose the level at which you want to close out the partial trade.
Step 4. Confirm the order
Once you have set up the take profit or stop loss order, you need to confirm the order. This will initiate the process of automatically closing out the partial trade when it reaches the specified level of profit or loss.
Conclusion
Closing out a partial forex trade is an essential part of forex trading. It allows you to take profits or minimize losses while still keeping a portion of your trade open. Whether you choose to close out a partial trade manually or automatically, it’s important to understand the process and follow the steps carefully. By doing so, you can maximize your profits and minimize your losses in the forex market.
