As discussed in the preceding post, Trade Management becomes straightforward with comprehensive preparation. A well-defined plan enhances objectivity and ensures disciplined execution. Trade Management involves placing Stop Loss (SL) and Profit Targets in the system and exiting trades at predetermined times when price action is unfavourable.
Here’s how it works according to our Trading System:
Minimum Number of Lots - Three: Trade with a minimum of three lots to ensure effective risk management and profit-taking strategies,
Stop Loss (SL) and Profit Target: As soon as the trade is executed, enter the SL and Profit Targets into the system. These should be predetermined during Trade Preparation. Apply the SL to all lots. Set individual Profit Targets for each lot (Lot 1, Lot 2, and Lot 3).
Risk Management: Move the SL to the entry point as soon as the target for Lot 2 is achieved. This secures your position and minimizes risk.
Exit Management: For trades executed at C1 (10 AM), review the position at C4 (1 PM) and again at C5 (2 PM). Exit if the candlestick pattern is adverse, even if the SL is not hit. For instance, if a long trade at C1 is followed by a Bearish Engulfing or Reverse Hammer pattern at C4, exit the trade. Close all trades by 3:25 PM. Be strict about this rule to avoid overnight risk.
Trade Management Tips
Strict Discipline : Always set your SL and Profit Targets in the system, not mentally. Once set, do not adjust them unless the trade is invalidated.
Scheduled Monitoring: Focus on checking trades at specific times. Avoid frequent monitoring, as it can lead to emotional decision-making.
Discipline and Diligence: Follow this routine with discipline, diligence, and honesty. This approach allows the market to work for you, reducing emotional interference.
By adhering to this structured process, you will likely see improved trading results. This concludes our section on Trade Mechanics. Please click on "Next Post" to proceed to the next section: An Introduction to Chart Setups.
Comments