Firstly I’d say I’m new to this community and this is my first post here❤️.
So I’m just curious to which is better because most traders would advise one to always monitor his trades and exit whenever he feels he’s wrong(trading in the zone) while that is good it could also lead to panic exit which causes unnecessary loses while some others would advise that once you set a trade, forget about it and move onto the next in order to build a winner’s mentality. So I’m stuck in between the two since both have a valid point. Can I get y’all opinion on this?
Welcome @donmike08 and congratulations. You have posted your first question and it is the most difficult question in trading. Find an answer this which works most of the time and you will be a successful and happy trader.
2 Likes
Welcome donmike08
For me, I think you should be doing both together. I think you should set you SL and TP and then monitor your trade. I think you should monitor your trade and move your stop loss to protect your profits while the market is moving towards you TP. Never move your SL away from your TP as by doing this your just increasing your risk. I wouldn’t move my TP.
3 Likes
But which do you outrightly prefer yourself?
I mean when the trade is currently against you and you’re in a temporary loss, is it advisable to exit your position to save further losses and move on or leave it to be since you’ve already removed your mind from it initially. It’s confusing
If you’ve done your risk management analysis correctly you should trust your SL and TP. It’s vital that you trust your process. Remember, if you set up your trade using your predetermined trading system and rules, if you hit SL or TP you should consider the trade as successful. If you have to exit your trade early you’re questioning your trading system and therefore the system is possibly incorrect.
Yes, I suppose you could just set it and leave it, however if you monitor the trade you can periodically move the SL towards your TP to protect any profits. The markets are very volatile so anything can happen, so our job as traders is purely risk management. Those of us that can manage our risk correctly will be more profitable than those who don’t.
1 Like
Oooh. 
This is definitely something I’d also like to understand. For emotional traders like me, I’ve been told that the best course of action is the 2nd option. To set up my trade and let it run its course. Monitoring it would cause me too much stress and I’d likely make decisions I’d eventually regret. 
Would you consider yourself as someone who easily gets affected by panic and your emotions? 
For me I have it a little easier since almost every trade I take is trend-following. This means exiting early is not an issue, I can always get back in for another bite.
To find my SL I use the chart firstly - in an uptrend set it just below the most recent completed daily bar. But it must also be minimum 1.5 x the ATR below the entry. I don’t set a TP on the first trade in the trend but when price rises to equal my risk from the SL, I move the SL to entry and look to open a second trade of the same size, with the same SL risk. Preferably this new entry will take advantage of some temporary price weakness and its SL will be above the entry price ofthe first trade. At this point I set a TP for Trade 2 at +1r and set a TP for Trade 1 at the same level.
This takes minimal time but demo it first. Of course, after the two trades close I am looking for the earliest possible re-entry long with a new Trade 1.
3 Likes
PS: If the trend is nice and consistent I don’t wait for a chart entry signal for Trade 2, just get in as soon as price reaches Trade 1’s break-even level.
1 Like
Hi Ria_rose,
This is so dependent on time frames. I assume you are short term (intraday) trading. Do you feel stressed if you only need to make one decision each morning of open trade or each close of market levels? I felt the same as you when I was scalping over a decade ago. I do not like intraday anything. Maybe that is why I don’t bother about being stressed - if I have analyzed my set up and entry, and decided on the frequency of checking levels and making decisions I do not get freaked out. That took me over 20 years to get over, and it really helped when I decided to severely reduce my leverage too.
1 Like
For me, it’s a mix. It really depends on whether I’ve got time to check the charts. If I don’t, I trust the entry and stops/TPs. But if a trade is open and I’m at the computer, I’ll watch and sometimes adjust the SLs/TPs.
Other times, if I’m around, and maybe my TP was too far out, but I’m in a profitable trade with price moving against me, I’ll move the SL from it’s first position to lock in profits. I’ll take 75 pips now instead of leaving my stop at say 50% or 60%% of TP hoping to get a full say 90 pips. In the past I would leave the trade open at 75 pips profit hoping to get that extra 15 pips and I’d end up losing more than that based on my stop.
So for me, it’s a mix.
I am confident with my trend strategy and process, in that I have a positive probability aim to be on the right side of a trade. I only trade one or two trades a day.
Then I follow daily price action to estimate where my T/P would reach - usually just before a support and resistance zone, and then place the S/L accordingly giving the movement space. That’s it. I close down my laptop. .Winning trades 55%.
There is no opinion, once your trade setup occurs you should already have an exit plan, however the markets move or use time, both those can negate your exit plan by creating and eliminating support/resistance differently to your trade setup, how do you know, experience.