Hi - I’m beginning to learn trade management is more critical than entries!
If you were in the trade below, short on eur/gbp but with a big hammer now appearing, would you take some profits at this point, or just let it carry on run to see if the trend continued or stop it if it closed above 1 of the MA’s?
Also, I’ve brought the SL down, but would you say it’s too far away/too close now? (The SL was originally just above the high of the circled candle)
Thanks
Hi kechel…
You brought up a good point. A crucial aspect of trading that everyone just don’t talk much about. This subject really doesn’t get the credit that it deserves.
And like you said its more crucial in swing trades or trades that you’d keep at least for few days to a week or a month. However it doesn’t have much relevance to short term or scalp trades.
Personally I aim for at least 50 pips and above with much larger SL on any given trade. For a scalper or pure technical traders my risk reward ratio may seem like a joke. But I place a lot of relevance to fundamentals /market sentiment/ though I’ve got few technical indicators in my arsenal /fibs, horizontal S&R and candlestick charts/. I try to incorparate them all. I think its good to have a little bit of this and that.
If you’re confident in your bias i don’t see much problem why one shouldn’t set a wide SL or no SL at all. If you don’t want to place any SL its advisable that you monitor your trades on a daily basis just in case. Forex is full of uncertainties. Having tight SLs on swing trades however will do more harm than good I can assure you that from personal experience.
Give your trades a little room to breathe by setting wider SLs, that is based on major support or resistance /daily TF is more reliable/. Some people prefer to move their SL to break even. But recently I’m finding that troublesome. As I get more comfortable in my trading method and more confident in my bias. I’m okay keeping my SL just as it is until I take profit. SL adjustment is the biggest part of trade management. On top of that scaling in and out of positions are a good way to keep your loss at minumum and take advantage of better price to get in on trades.
If youre not good with your entries /still entrys are tricky you just never know/ a good trade management will take you far. It can conceal any entry flaws.
Hoep you had something to take out of this rant.
thanks for the rant rookie39 
I have a lot of those SL questions going around my head.
I spent so much time working on entries & initial SL’s, that moving them & TP placement was almost an afterthought… until you actually get into a few winning trades.
I’m still working through it all on demo. Just yesterday I had a couple SL’s hit (audchf, euraud) because I think the SL was too close, then a USDJPY had too low a TP & I missed out on loads more pips - definitely a work in progress.
Who’d have thought managing winning swing trades would be so difficult.
Thanks for your help.
You’ll always leave some pips on the table. No doubt about that. No SL and TP is perfect. Its all up to your trading method Kechel.
You’ll slowly figure things out as you progress further on. I advice you to trade more frequently. And write a journal - write down things that worked and things that didn’t. You have to monitor your progress. If not its hard to progress further. I think thats why a lot of wanna be traders either quit in the midway or take years to achieve consistent profitability. Its a lot work. If you’re willing to put in the work. It’ll all be paid off in the end.
Good luck!
Hi kechel,
I’m not familiar with your method, but are those 10 and 25 MAs you’re using? I’ve just skimmed the pair and I think I can use the 10 MA to signal when to take some profit and the 25 to trail stop. What do you think?
hi flows
it’s the 8 & 24 ema’s, and yes, I’ve been trailing my stops just on the other side of the 24 on trending markets like aud/jpy & nzd/usd, where it’s been working ok.
I’ve tried it on the 4h (like in the example I posted above), but I’ve also been trying it on the 12h where you get stopped out less on spikes.
I quite like combining candlesticks for entries & take profits as well.
Let me know how you get on if you give it a go…
cheers
Ah, I see. Your strategy seems solid. Though, looking back, I too will be concerned seeing how price hits 24 EMA quite often before reversing. I try applying PSAR indicator to your strategy, and I see it being hit less often. Have you played around with it before?
I haven’t really tried using Psar, I’ll have a look at it more closely.
I think it depends which timeframe you’re using in deciding which MA to trail your SL behind.
Like I said, I’m using the 12h, & the 24 ema seems to wrap around most of the retracements I would want it to. If you’re using the 4h, i think you’d need to use a bigger MA. By ratio, I guess the 24ema on the 12h would show as the 72ema on the 4h.
Great, have fun playing with it.
Cheers,
If youre not good with your entries /still entrys are tricky you just never know/ a good trade management will take you far. It can conceal any entry flaws.
maya
