Partial Close
Definition
Partial close is closing only a portion of an open position while keeping the rest open. Common pattern: close half the position at +1R to lock in profit and reduce risk, then let the remaining half run with a trailing stop to capture extended moves. Combined with breakeven on the remaining position, this 'free trade' setup is a popular trade-management technique.
In-depth: Partial Close
Partial close is a fundamental position-management technique that separates exit decisions from binary close-or-hold. It lets a trader simultaneously realise some profit and maintain market exposure for further gains.
Mechanics: 1. Open position of size N at entry price E 2. Set stop-loss at S (initial risk = |E − S| × N pip value) 3. Price moves to first profit target T1 (commonly +1R, where R is the original risk distance) 4. Close 50% of position at T1, realising profit on closed portion 5. Move stop-loss on remaining 50% to entry price (or entry + small buffer) 6. Let remaining position run with trailing stop, target T2, or other exit logic
The pattern produces three favourable scenarios and one neutral: - Scenario A: T1 hit, T2 hit. Profit on both halves; substantial win. - Scenario B: T1 hit, breakeven hit. Profit on first half, breakeven on second. Small overall win. - Scenario C: T1 hit, trailing stop tighter than breakeven. Profit on first half, profit on second (smaller). Solid win. - Scenario D: T1 not hit, initial SL hit. Full loss as designed.