Introduction to Closing Trades in MetaTrader 5
Executing a trade exit is as critical as the entry itself. A well-timed closure can mean the difference between realizing a profit, cutting a loss, or letting a winning position turn sour. This guide provides a professional, in-depth look at the various methods and strategies for closing trades within the MetaTrader 5 platform, ensuring you can manage your positions with precision and confidence.
Understanding Trade Exits: Why and When to Close a Position
Every open position must eventually be closed. The decision to do so should not be emotional, but rather part of a pre-defined trading plan. An exit strategy dictates the conditions under which you will close a trade. These conditions are typically based on:
Profit Target: The price level at which you are satisfied with the gains.
Maximum Acceptable Loss: The price level where the trade idea is invalidated, and further losses must be prevented.
Change in Market Conditions: New macroeconomic data, geopolitical events, or a shift in technical indicators that undermine the original basis for the trade.
Time Horizon: Some strategies are time-based, requiring trades to be closed at the end of a session or after a specific period.
Key Definitions: Market Orders vs. Pending Orders in MT5
Understanding order types is fundamental to managing exits. When closing a trade, you primarily interact with two categories:
Market Order: An instruction to close your position immediately at the best available current market price. This provides certainty of execution but not of price, which can be affected by slippage in volatile markets.
Pending Order: An instruction to close your position in the future if the price reaches a pre-determined level. The most common types for closing trades are Stop Loss and Take Profit orders.
Overview of Trade Closing Methods in MetaTrader 5
MT5 offers a robust set of tools for trade closure, catering to various strategies. These methods range from immediate manual intervention to fully automated exits. We will explore:
Instant closure using market execution.
Automated risk management with Stop Loss orders.
Automated profit-taking with Take Profit orders.
Scaling out of positions with partial closures.
Methods for Closing a Trade in MetaTrader 5
Here we detail the practical steps for each primary closing method within the MT5 interface.
Closing a Trade Immediately: Using Market Execution
This is the most direct way to exit a position at the current price. It is ideal when you need to react instantly to market movements.
Navigate to the Toolbox window (usually at the bottom of the screen) and select the ‘Trade’ tab.
Your open positions will be listed. Identify the trade you wish to close.
Click the ‘x’ icon located at the far right of the position’s row. This executes an immediate market order to close the entire position.
Alternatively, you can right-click on the position and select ‘Close Position’ from the context menu. This will open the order modification window, where you can confirm the closure by clicking the yellow ‘Close…’ button.
Using Stop Loss Orders to Automatically Close Trades
A Stop Loss (SL) is a crucial risk management tool. It’s a pending order that automatically closes a losing trade once the price reaches a specified level, preventing further, and potentially catastrophic, losses.
You can set a Stop Loss either when you first open the trade or by modifying an existing position:
Right-click on the open position in the ‘Trade’ tab.
Select ‘Modify or Delete’.
In the ‘Stop Loss’ field, enter the price at which you want the trade to be automatically closed.
Click the ‘Modify’ button to confirm.
Utilizing Take Profit Orders to Secure Gains
Conversely, a Take Profit (TP) order is a pending order that automatically closes a profitable trade when the price reaches your target level. This secures your gains and removes the temptation to hold on for more, which can often lead to a reversal.
The process for setting a Take Profit is identical to setting a Stop Loss:
Right-click on the open position in the ‘Trade’ tab.
Select ‘Modify or Delete’.
In the ‘Take Profit’ field, enter your desired profit-target price.
Click the ‘Modify’ button to confirm.
Partial Closure of Trades: Managing Risk and Realizing Profits
Partial closure allows you to close a fraction of your position while leaving the rest open. This strategy is excellent for de-risking a trade—for example, by closing half the position to lock in some profit and moving the Stop Loss to breakeven on the remainder.
In the ‘Trade’ tab, double-click the position you want to partially close. This opens the order window.
Ensure the ‘Type’ is set to ‘Market Execution’.
In the ‘Volume’ field, enter the portion of the trade you wish to close (e.g., if you have a 1.0 lot position and want to close half, enter ‘0.50’).
Click the yellow ‘Close…’ button. This will close the specified volume, leaving the remaining volume open.
Advanced Trade Management and Closing Strategies
For more sophisticated trade management, MT5 provides advanced features that can help optimize your exit strategy and protect your capital.
Trailing Stop Orders: Dynamic Protection for Open Positions
A Trailing Stop is a dynamic Stop Loss that automatically follows the price as it moves in your favor. For a long position, it moves up as the price rises but remains fixed if the price falls. This protects accrued profits while allowing the trade to continue its upward momentum.
Right-click on your open position in the ‘Trade’ tab.
Hover over ‘Trailing Stop’ in the context menu.
Select a pre-defined point distance or choose ‘Custom…’ to specify your own value.
A Trailing Stop is client-side, meaning it only functions while your MetaTrader 5 platform is open and connected to the server.
Using the ‘Close By’ Feature for Hedged Positions
If you have two opposing positions on the same financial instrument (a hedge), the ‘Close By’ feature allows you to close both simultaneously. This can be advantageous as it often saves you the spread cost on one of the closures.
Double-click one of the hedged positions to open the order window.
For ‘Type’, select ‘Close By’.
In the ‘Position’ field that appears, select the opposing position.
Click the yellow ‘Close’ button to execute. Both positions will be closed.
Understanding and Closing Trades via the ‘Orders’ Tab
While active positions are managed in the ‘Trade’ tab, it’s crucial to understand how to manage the components of those trades—namely the Stop Loss and Take Profit levels.
In the ‘Trade’ tab, you can see your pending SL and TP orders listed directly under the parent position. To remove or adjust an SL or TP before it’s triggered, you don’t need to close the trade. Simply right-click the position, select ‘Modify or Delete’, and then either change the values or set them to zero to remove them.
Tips for Effective Trade Closing Strategy Development
Define Exits Before Entry: Always know your profit target and maximum loss before you place a trade.
Be Disciplined: Stick to your plan. Do not move your Stop Loss further into a loss or close a trade prematurely out of fear.
Adapt to Volatility: In highly volatile markets, you may need wider Stop Loss levels and more conservative Take Profit targets.
Review and Refine: Regularly review your closed trades in the ‘History’ tab. Analyze your exits to see if they could have been managed more effectively.
Troubleshooting Common Trade Closing Issues in MT5
Even with a solid plan, you might occasionally encounter issues when trying to close a trade. Here’s how to handle common problems.
Dealing with ‘Trade is Disabled’ Errors
This message typically indicates that trading for that specific instrument is not currently possible. Common reasons include:
Market Hours: You are trying to close a trade outside the official trading hours for that asset (e.g., stocks or indices over the weekend).
Symbol Expiration: The instrument you are trading is an expired futures or options contract.
Broker Restrictions: Your account type may have restrictions on certain symbols, or the broker may have temporarily halted trading.
Handling Slippage During Market Order Closures
Slippage is the difference between the price you clicked to close at and the price the order was actually executed at. It’s common in fast-moving, volatile markets or those with low liquidity.
While you cannot eliminate slippage for market orders, you can mitigate its impact by avoiding trade closures during major news releases. Using Take Profit orders also helps, as they are limit orders that execute at your specified price or better.
Troubleshooting Failed Order Execution
A closure request might fail for several reasons:
No Connection: Your MT5 platform has lost its internet connection. Check the connection status in the bottom-right corner.
Invalid Parameters: You may have made a mistake when attempting a partial closure, such as entering a volume greater than the position size.
Re-quotes: In volatile conditions, the price may have moved so significantly between your click and the server’s execution that the broker sends a new price (a re-quote), which you must accept to close the trade. This is common on ‘Instant Execution’ accounts.
