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.

The asymmetry is favourable: the 'free trade' structure (after first partial close) means the remaining position has bounded downside but unbounded upside.

Position-sizing implications: - A 1.0 lot trade with 50% partial-close has effectively 1.5× the position-sizing exposure of a 1.0 lot trade closed at T1: half the position closes at +1R for 0.5R profit, while the remaining 0.5 lots provides additional upside. The risk profile shifts toward larger expected wins at the cost of more complex P&L analytics.

Implementation in MetaTrader EAs: - MT5: native `OrderSendAsync` with `volume` parameter less than the position's total volume creates a partial close. The position remains open with reduced size. - MT4: partial close requires explicit closing of one trade and re-opening at the same price for the remaining portion — more complex and prone to slippage during the closure-reopen interval.

Variations: - Multiple partial closes: 33% at T1, 33% at T2, 34% running to T3 with trailing stop. Maximises upside capture but complex to manage. - Asymmetric splits: 70% closed at T1, 30% running. Balances profit-locking against extended-move capture. - Time-based partial: close 50% after N hours regardless of price (for time-bounded strategies).

Downside considerations: - Each partial close incurs spread/commission costs; multiple partials erode edge through transaction costs - Complex partial-close logic in EAs creates more code paths to test; bugs in partial-close handling are common - Tax implications (in jurisdictions where forex is taxed): partial closes can create complex reporting situations