I have a condition in my trading where if all my positions (at least 3) are showing a total profit of 0.5 R per position, I simply take off all my positions. Hence if I have 3 positions, I close all 3 positions when there is a total profit of 1.5R. If I have 4, then I close out when the total profit is 2R. I like to call this the 'ebb out', for lack of a better term. And yes this is my original idea, after watching my portfolio of trades ebb up and down too much.
And I was shorting AUD/JPY and XAG/USD at the same time I had the DBS and OCBC stock positions.
Note this is only applicable when you have at least 3 positions at the same time.
The rationale is that when you have 3 or more positions, some will show losses, some will show profits. And these positions will be in a state of 'flux', so to speak. You will see the ebb and flow of profits then losses then profits again in these open positions. So when this happens, you just want to catch the ebb preferably when it is showing profits. I set the total profits I am willing to take at a sum of 0.5R per position so that the total profit is meaningful and I remove the exposure and risk of giving back too much profits and seeing them turn to losing positions.
Typically, what happens with having 3 or more positions is that your equity curve starts becoming more volatile, and you may see yourself having an open loss of 3R or more. So that is going to affect your trading judgement the more Rs you experience, much like how fighter pilots are affected by the number of Gs they are pulling. So having this rule is like having a reset button. You press the button and take the profits and close out and the pressure goes away.
While profit-riding purists may say that this rule will cut short your expected profit of 3R or more, more often then not I found that this rule protects your profits and overall makes your equity curve more attractive. When luck throws you a nice profit, just take it!
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