Meaning of break even and lock profit

Beginner Questions
1

Today my account was wiped out completely when market suddenly start to rise on my sell positions and even leaving a negative balance…Having said that, I will give a break for further study.

Can someone please explain to me with examples the following:

- Always move your stop to Break Even,
- Lock in 1 pip of profit when you are up to 10, 15 or 20 pips
- Once you get to 20 pips of profit, CLOSE 50% of your position guaranteeing you a profit and the stop loss to either breakeven or 1 pip profit and let the market ride

Is there a special software for doing these?

2

ALWAYS trade with a stop loss. That should be your number one rule. No one can give you an exact set of rules for placing stops. You need to read through the babypips school and dont place another trade until you have done. Couple of other quick things: always have a good risk/ reward ratio, look out for news annoucements, always plan what you will do if price moves in a certain direction. There are a million things to learn so go through the school qnd then come back with any questions.

3

I have to agree with James. Using a stop loss is essential. It’s like putting on a seatbelt on before you drive off.

Moving stop to breakeven is based upon your understanding of the market, which implies that you had a plan when you opened a position. Did you? (Honest question). What were your support resistance levels, trend lines, price action, etc? What did you base it on before opening a position?

Where did you get your rules of locking in 1 pip of profit? Why close 50% when its reached 20 pips? What time frame are you trading at? I’m not giving you a lecture or being derisive, simply trying to pinpoint, if not expose the flaws, in your strategy.

A good strategy is not based on specific pip values, like 20 pips. Its more like risk to reward ratios, usually 1:3 or higher, news, market sentiment (volatile, quiet), pattern formation, etc. Following entry, there is trade management. If there is a significant breakup or down, move stop loss to zero after the first pull back, if there is continuation, move stop loss to lock in profit to the peak or valley of first wave, essentially trail your stops.

The use of Fibonacci and S/R levels is helpful to have some sense where the market might end. Trail stops and when market reaches close to TP (and if you are feeling nervous) then scale out of your position. If market reverses without hitting TP, then either let it run back to your trailing stop (in case it reverses again) or close your position. And the list goes on.

It is very possible to take 70 to 80pips all the way to 150 and over. Trading is procedural, meaning you apply your strategy that you have tested on demo and proven it has an edge.

On top of all that, do you have a psychological strategy? How to deal with your own mind and the procedures you apply when you trade.

As far as software goes, there are a lot of robots or EAs, expert advisors (another name for trading robots). However, if you haven’t got a handle on your own emotions, then you will still find yourself closing out your’s robot’s positions early or panicking when they go against you.

So, perhaps you are getting an inkling that, there is a lot more to trading than meets the eye at first. My suggestion is start with yourself first, manual trading, demo account and take a good 6 months to a year to learn if you are serious about this. I appreciate your question and asking it and wish you the best of luck.

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