How to Execute a Partial Profit in MT4 and MT5: Safeguarding and Maximising Your Trades

Discovering how to take a partial profit on MT5 is essential for any trader looking to enhance their trading strategy and protect their open trading positions. 

This tutorial is tailored to guide you through the process of executing a partial close in both MetaTrader 4 (MT4) and MetaTrader 5 (MT5), ensuring you're equipped with the knowledge to manage your trades more effectively. 

In this tutorial we will look at:

• How to execute a partial close in Metatrader 4 or Metatrader 5
• 3 Powerful Reasons Why You Would Execute a Partial Close in MT5
• My number 1 reason to use a partial take profit when trading the Forex markets
• Conclusion
• FAQs

Let’s look at How to Execute a Partial Close in MT4/MT5

Follow these steps to implement a partial close on MT4 or MT5. 

In this case we are going to assume you have already opened a 1 lot order on the USDJPY pair.

And we will close half of the position for this partial close trading tutorial.

Step 1: Assess Your Trade

As mentioned above, we have a 1 lot order open already. And you want to evaluate your open position to confirm you want to partially close it. Consider the 3 powerful reasons mentioned below to determine if a partial close is the best strategy. And remember, you can always practise this strategy first on a live demo account.

Step 2: Open the 'Trade' Tab

Navigate to the 'Trade' tab in the 'Terminal' window at the bottom of your MT4 or MT5 platform. Here, you'll find a list of your open positions.

Step 3: Select 'Modify or Delete Order'

Right-click on the position you wish to partially close and select 'Modify or Delete Order' from the context menu. A order window will then pop up, giving you the chance to modify this partial close trade.

Step 4: Specify the Partial Close

In the 'Volume' field, adjust the lot size to reflect the portion of the trade you wish to close. In our example here, we initially opened a 1.0 lot position on USDJPY and we are going to close half of it, or 0.5 lots. This would then leave us with 0.5 lots as our current open position once executed.

Step 5: Execute the Partial Close

After adjusting the volume, click on the 'Close' button (in yellow below) for the 0.5lots. This action will partially close your position, reducing your exposure, lowering your margin or potentially locking in partial profits.

Step 6: Confirm the Partial Close

Depending if you have One Click Trading on, the window may close or you can simple click OK to close the screen. You should see the adjusted position size reflecting the partial close you've executed. Below you will see the remaining 0.50 lot position, reflecting half our initial size.

Hit play on the MT5 video tutorial below to follow the simple steps for executing a partial close with Nathan Yin. This MetaTrader 5 training session will guide you through mastering partial profit-taking in just 1 minute.

3 Powerful Reasons Why You Would Execute a Partial Close in MT5

There are several strategic reasons for employing partial closes in your trading, no matter if you are trading Forex, Indices, Gold, Oil or Stocks.

Let’s take a look at each one in more detail:

1. Avoiding Margin Calls: If you're facing a significant loss, executing a partial close can reduce your overall position size. This reduction decreases the likelihood of a margin call, offering you a buffer to re-assess and adjust your strategy without the immediate pressure of liquidation.
2. Securing Profits: In scenarios where you're in profit but anticipate market volatility or are awaiting a major announcement, taking partial profits can be wise. This move locks in gains and lowers your exposure, ensuring a sudden market shift doesn't erase your hard-earned profits.
3. Risk Management through half take profit and moving your stop to break even: A powerful yet often overlooked technique involves taking a 50% partial profit when your trade moves in your favour by an amount equal to your initial risk (1R). For instance, if you risked $200 on a trade (1R), and the market moves favourably by $200, you then secure 50% of your position as profit. And as soon as you do you will adjust your initial stop to your break-even point. This strategy reduces your risk to virtually zero, allowing the remainder of your position to seek additional profits without risking your initial stake.

My number 1 reason to use a partial take profit when trading the Forex markets

I vividly remember the pure frustration of watching a position move in my favour, only for it to retreat all the way back to break-even, then dip further to hit my stop loss. 

Nobody likes to take a loss after initially getting the direction right.

It was a cycle of annoyance that seemed all too frequent, a challenge many traders face but struggle to overcome.

The turning point came when I began implementing the 1R risk management strategy, coupled with moving my stop to break even after a trade moved in my favour by the initial risk amount of 1R. 

This seemingly simple adjustment had a profound impact on my trading outcomes. 

No longer did I watch helplessly as a profitable position eroded into a loss; instead, I secured my initial risk once a trade showed promise. 

This strategy shift led to a steady increase in my win percentage, and more importantly, my confidence in my trading strategy.

The psychological boost was undeniable—knowing a part of my capital was safe, regardless of how the market would turn, changed my entire approach to trading.

Experimentation became a key part of refining my strategy further. I started to play around with the idea of selling portions of my position—initially 1/3rd and then 25%—after achieving a 1R move, before moving my stop to break even. 

This approach allowed me to capture profits while still leaving room for potential upside, effectively balancing the scales between risk and reward.

The proportion of the position I decided to sell at 1R varied depending on the strategy I was employing at the time. 

For my trend following strategy, where the potential for extended moves was greater, I leaned towards selling a smaller portion of my position, say 25%, aiming to ride the trend as far as it could go with 75% still riding. 

Conversely, when using my range bound trading strategy, I was more inclined to partially close 50% of my position at 1R.

This personalised approach to risk management, tailored to fit the nuances of my trading strategies, was a game-changer. 

It not only protected my capital but also maximised my profitability in various market conditions. 

Conclusion

Mastering the execution of partial closes in MT4 and MT5 is a pivotal skill for any trader aiming to protect their capital and maximize profits. 

By strategically employing partial closes, you can navigate through market uncertainties with greater confidence and flexibility. 

Remember, the key to successful trading lies in effective risk management and the ability to adapt your strategy to changing market conditions.

Whether you're mitigating losses, securing profits, or employing the 1R strategy for risk-free trading, partial closes offer a versatile tool to enhance your trading approach.

FAQs

1. What is a partial close in forex trading?

A partial close in forex trading refers to the action of closing only a portion of your open position instead of the entire trade. This strategy allows traders to lock in profits, reduce exposure, or manage risk without completely exiting their position. It's particularly useful in volatile markets or when wanting to secure some gains while letting the rest of the position potentially earn more.

2. How do I decide the right time to take a partial profit on MT5?

Deciding the right time to take a partial profit involves analysing market conditions, your trading strategy, and your risk management rules. Consider taking partial profits when the trade has moved significantly in your favour and you anticipate a potential reversal or when you've reached a predetermined profit target. Additionally, major upcoming economic announcements or changes in market sentiment can also be good indicators that it might be time to secure some of your gains.

3. Can I automate partial closes in MT4 or MT5?

Yes, partial closes can be automated in both MT4 and MT5 using Expert Advisors (EAs). EAs can be programmed to execute partial closes based on specific criteria, such as reaching a certain profit level or after a predefined time. However, creating or setting up an EA requires some technical knowledge of the MQL programming language for MT4/MT5.

4. Is it possible to set up a partial close to execute automatically when my trade reaches a certain profit level?

Within MT5 you can set an automated trailing stop loss, but MT4 does not natively have this function. Directly through the standard MT4 or MT5 interface, you cannot set a partial close to execute automatically at a certain profit level without the use of EAs. However, by using an Expert Advisor, you can specify conditions under which a partial close should occur, such as when the trade reaches a specific profit threshold. In my Trailing Stop Loss Strategy blog post here I show which Expert Advisor you can use to do this.

5. How does executing a partial close affect my risk management strategy?

Executing a partial close can significantly enhance your risk management strategy by allowing you to secure profits and reduce exposure while still keeping a position open for potential further gains. By taking out a portion of your trade at a profit and possibly moving your stop loss to break even for the remaining position, you effectively reduce your risk to zero. This approach can help manage emotional decision-making and improve the overall performance of your trading strategy by ensuring some gains are locked in while still allowing for the possibility of additional profits.