A partial close in trading, such as on FNmarkets, allows traders to close part of an open position while leaving the rest of the position active. This strategy helps traders secure some profits, reduce risk, or lock in gains while still leaving part of the position open for potential further profits. It is a flexible approach to managing trades without completely exiting the market.
For example, let’s say you open a buy trade on EUR/USD with a 0.5 lot position at 1.0850.
After some time, the price rises to 1.0900, and you’ve made a profit.
Instead of closing the whole position, you decide to partially close 0.3 lots at 1.0900.
This means you secure the profit from the 0.3 lots, but the remaining 0.2 lots of the original position remain open, continuing to track the price movements.
Locking in Profit: By closing part of your position, you can secure some profit while still keeping part of the trade open to benefit if the price continues in your favor.
Reducing Risk: If the market starts to move against your trade, you can reduce your exposure by partially closing the position, minimizing potential losses.
Flexibility: It gives you the ability to adjust your position according to changing market conditions without fully exiting the trade.
In a Bullish Trend (Profit Lock-In):
You open a buy position on EUR/USD at 1.0850, and the price rises to 1.0900. You choose to partially close 0.3 lots at 1.0900, locking in some profits. The remaining 0.2 lots stay open, continuing to move in line with the market.
In a Bearish Trend (Risk Reduction):
If you see the market turning against your trade (e.g., EUR/USD starts to fall), you might decide to partially close your position to reduce exposure. By closing part of the position, you’re minimizing potential losses while still having some skin in the game if the market reverses.
A partial close is a useful tool in trading for securing profits while keeping part of the position open for potential further gains or to reduce exposure when the market moves unfavorably. It provides traders with flexibility and better risk management without needing to fully exit the market.