How to Take a Reasonable Profit

The profit-taking price is one of three obligatory factors (the remaining two are the stop-loss price and open a position price) that you need to set before making a trade. However, most traders often ignore the profit-taking price, or do not have a reasonable profit-taking method but often take profit on a personal presentiment. This makes your profit significantly reduced, some traders even take profit early when the profit from that trade is not even equal to the amount they set to cut loss. A professional investor needs to realize that, even if their trading system is only 50%, or even lower, a reasonable profit-taking price compared to the stop-loss price (preferably 2 times or more up) will help them earn a profit.To get more news about WikiFX, you can visit wikifx official website.
　　In this article, the author will guide you to use the Fibo Extension tool to be able to set a reasonable profit taking price when you execute a buy/sell order during the correction phase of a market trend. For most experienced traders, they tend to trade during the corrective market phase (prices are pulled back to the MA line) rather than use catching- peaks/valleys method. This will help them to be more secured, at the same time, not to lose the opportunity to seek a greater speculative profit, because in a market trend, prices will move very far.
　　When trading at the adjusted price range, you will set a point at which profit taking price is considered reasonable enough. Actually, very few investors can answer this question properly, maybe they have another way to determine the profit-taking price, the author herein absolutely do not judge whether the tool they are using is right or wrong, because every individual acquaintances with the use of certain indicators, as long as they are effective.
　　The purpose of the article is to just recommend the Fibo Extension tool to determine the profit taking price, which can provide investors with more options or provide the new comers in this industry who have no idea how to determine the profit-taking price, some fundamental knowledge before they start their games.
　　Tradingview gives every trader a chance to own an account for free, this tool is literally integrated in it. From the chart view, you can create it by just clicking on Gann and Fibonacci Tools >> Trend-Based Fib Extension. See the picture below

　　The important thing before using the Fibo Extension is that you need to understand exactly which tool is used in the market situation or time period. The Fibonacci Extension is used in a trending market and is drawn when you want to execute an order at the price line being pulled back to the MA line. Therefore, if the market is in an uptrend, the MAs need to slope upward; in a downtrend, the MAs need to slope downward; the new bottom area, the peak area before the pulled back price, the old bottom area and the MA lines must create a gap on the price chart marked with white parabola (see illustration).
l Click on the toolbar, connect the old bottom, the newly created peak of the trend, the new bottom when the market pulls back to the MA line, the Fibo levels will be created as shown in Figure 1.
　　l Use the Fibonacci Extension to determine profit taking prices
　　l Figure 2 illustrates how to use the Fibonacci Extension to determine profit taking prices of a gold price chart, under 1 day time frame.
　　l Fibonacci Extension creates many different levels of Fibo, but in the authors personal experience, you need to pay attention to 3 target price levels at Fibo 61.8; 1 and 1,618, and in fact, you only use 2 or 3 profit taking prices only.
　　l As you can see in Figure 2, the Fibo 61.8 mark is 1285.59; The Fibo 1 mark is 1302.51 and the Fibo 1,618 mark is 1329.87, which is achieved and these are the 3 profit-taking prices that you expected from the beginning.