Flat On A Failure


DEFINITION of 'Flat On A Failure'

Closing out a position and taking profits when the security in question moves up to a target level but fails to break through it. This can be seen as a method of extracting what profit a trade has been able to produce so far because the trader believes that further movement past the target level is unlikely.

BREAKING DOWN 'Flat On A Failure'

For example, suppose that a trader is in a long position on a given currency pair and the exchange rate moves upward in her favor by a moderate amount, but fails to move past a key resistance level she was expecting to act as a catalyst for further movement. In this case, the trader would probably deem the trade flat on a failure and close the position, taking whatever profit has been earned.

  1. Exchange Rate

    The price of a nation’s currency in terms of another currency. ...
  2. Profit Taking

    The act of selling a security in order to lock in gains after ...
  3. Currency Pair

    The quotation and pricing structure of the currencies traded ...
  4. Forex - FX

    The market in which currencies are traded. The forex market is ...
  5. Cross Currency

    A pair of currencies traded in forex that does not include the ...
  6. Dead Cat Bounce

    A temporary recovery from a prolonged decline or bear market, ...
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