Let’s say you’re forex trading more than 1 lot, and it’s a winning trade – the pair price has hit your target for profit, previously calculated – and you exit 50% of your current position. Opinion can vary, 60, 70%, but the main thing is you are locking in profit – scaling, or scaling out, your profitable trades.

Time has passed – the market has moved to reflect new circumstances, what was true then, is now altered… so you change your position and go into a revised risk/reward situation.

If you have a stop-loss placed, then this also needs to be revised to account of the changed situation – most likely you’ll be moving it to your original entry price.

Some will say that you’re now in the position of playing with the broker’s money as if the broker were House at the casino and you can’t lose – not quite true. It’s still your money but you’ve locked in some profit. You can’t lose on your original position, having adjusted the stop – you can lose on the potential of your position as it stands. But you are a winner – now is the time to give yourself a pat on the back.

The losing trades
What if you’ve lost? – you never do the same thing with losers, just to try to claw back on the vanishing pips – the market might suddenly reverse etc. etc… Never change a stop on a losing trade, unless you’re getting out entirely.

Result?
The result of scaling your winning trades efficiently is an increased pip profit per trade – while at the same time your losses should remain the same. There will always be losses, but there’s an edge here.