Podcast:
Description:
In this video:
00:29 A simple solution of managing open trades – Set & Forget
01:34 Trade Management
03:45 Made an incredible +2.9% return in just 24 hours
05:01 Six out of six trades, all hit full profit
How do I manage my open trades? It’s a question I get asked all the time, so let me show you how I manage my trades.
Hi it’s Andrew Mitchem here the Forex Trading Coach. Today is Friday, the 12th of July.
How To Manage Open Trades
And that’s right, it’s a question I get asked all the time: How do I manage open trades? And of course there are so many different potential ways of doing that, and it’s something I’d like to share with you how I manage trades and how I teach my clients to manage their open trades. And really it comes down to being quite a simple solution. You see, for me, the way that I like to manage almost all of my trades is on a set and forget policy, or set and forget approach. And what that means is I have my stop loss in place for a reason, for a technical reason. I have my profit target in place for a technical reason, based on everything that I know and understand about the markets. And then, when I’ve taken that decision to place the trade, I know I have a set loss. So in other words, I have a set risk amount of my trade that if the trade gets stopped out then I lose X percent and that’s, say, half of one percent.
So that’s on the worst case scenario, the trade gets stopped out. But how do I manage the trade on an ongoing basis? Well, I’ll tried to leave the trade to do its own thing, because it doesn’t matter who you are, where you live, what you know, no one can control the market and so put the profit target in there for a reason and let the trade do its thing because you remove your emotions from your trading when you do that. And so really that’s probably the best approach you can take.
The other way of taking a management decision over your open trades and managing them is to really assess each ongoing chart candle. So in other words, if I’m taking a trade on the daily charts and the trade is still open 24 hours later, I’ll assess the look of the candle and the position of the candle on the daily charts if the trend let’s say, selling a currency pair, and the trend looks like it’s continuing down, then I will let the trend or the trade itself continue in the market, looking to ride it down into the second day.
If I’m taking a trade position on let’s say an hourly chart, I try and check the completion and the look of the bar on the completion of the next hour, so every hour that the trade is in the market. That’s if I’m deciding to manage the trade by actually looking at what’s happening. And so, what you tend to find then, is let’s say we were buying a currency let’s say the Euro USD on a one hour chart and the trade’s looking good, it’s climbing up really nicely, and then all of a sudden I see an exhaustion candle and a potential reversal candle so a bearish candle that looks like the market’s about to tip over and head back down again.
At that time, that’s giving me a clue to say it could be a god opportunity now to close out of this trade, because it looks like the market is going to then head back down against my buy trade. Probably still in some profit at that time but not reached the full profit target. So that’s the other way of doing it. You either completely set and forget, all of your trades, or you manage them on an ongoing basis by monitoring the completion of each next bar, so whether that would that be a 15 minute, an hour, or four hourly, or daily, whatever time frame you were trading.
So I hope that helps you there, but whichever you decide to go, it’s probably best to decide one or the other and stick to that method.
