Tuesday, 25 June 2019

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Manage trades (basic advice)

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Manage trades (basic advice)

Being inside the market we will try to optimize both the possible benefits and minimize possible losses.

Keep in mind that at the beginning of any trade, NEVER know how it will develop the same, or the points of profit or loss that we will get. Therefore, it is difficult to ascertain with our decision (where and when to close the trade), but we ALWAYS respect the rules regarding the conditions of entry (where and how).

Independently of the examples that are detailed later, you can CLOSE the trades in the levels (red or blue) if we see that the price is stopped, retestea, it does double ceiling or double soil, etc.

Examples:

1.-supposes that THERE IS upward trend and we are looking for the following level (new resistance in the zone of activity) Superior:

● Raising the "stop loss" to the minimum of the previous candle where there was significant resistance.

● Draw a guideline bullish and if the price crosses close the trade.

2.- It is supposed that THERE IS downward trend and we are looking for the following level (new support in the zone of activity) lower:

  • We lower the stop loss to the maximum of the previous candle where there was a significant support.
  • We draw a guideline bearish and if the price crosses it close the trade.

3.- It is supposed that we are gaining 2 points:

● We put the "stop loss" in the entry price for the worst cases close the trade at "break-even" point (neither losses nor earnings).

( If in a certain moment we are gaining +2 points and we end up by closing losing  with -2 points is clearly that the trade has not been managed well, a trade with benefits can never finish in losses).

4.- Stop loss fixed:

● We can establish this by: 1- a amount fixed, 2- a percentage of value of price and 3- a number of fixed points.

5. - Exit by inactivity:

● We left if "N" bars do not improve our profit position due to the lack of volatility in the market.

6.-" Trailing stop" by setback of the price:

  • We are "chasing" to the price with our "stop loss" as our benefits are increasing. With "trailing stop" we assure part of the benefits before the possibility of an eventual setback of the price in ours against. "We" can "follow" the price with "trailing stop" to "X" points of distance or to a percentage of distance "X" calculated on the major benefit reached by our trade.

In practice, if we have a "trailing stop" of 6 points to pass that every time the price moves 6 points for us, the "trailing stop" will move equally and in the same direction, others 6 points.

7.-Stop of simple aim:

● We close the trade without attending to any to technical reasoning if the obtained profit seems to us to be sufficient.

 

Autor: Traderpirata.com

Erick Gálvez
Author: Erick GálvezWebsite: http://www.asdforex..comEmail: This email address is being protected from spambots. You need JavaScript enabled to view it.
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ASDForex manager and professional trader since 2008. I am also Aleforex.com manager where you can view the services that I give
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