Professional Documents
Culture Documents
TRADES.
Profit is profit as they say, but to survive this game you must let the
market do the work for you.
You're going to kick yourself if you don't already know this, and
you are going to kick yourself even harder if you know this and
ARE NOT IMPLEMENTING IT NOW...
THE PROBLEM
The problem is that you can enter trades but feel like you either
take profit way too early and you regret exiting... This is normal for
amateurs as they see the market continue.
Or you let the profit level or take profit order close you out.
Because you have told the market when YOU want to exit. Instead,
you could let the market tell YOU when you should be taken out.
How many times have you exited a trade at a take profit level and
the market continued to rise higher and higher? I bet it happens a
lot... So let's lose this bad habit.
MINDSET CHANGE
It's no secret that your mindset plays a large part in trading. You need to
forget the information that profit targets are EXITs... Instead, you need to
see them as areas of the market that are an interest.
THE SIMPLE
SOLUTION
Ready to kick yourself?
The solution is to simply start using trailing stop losses, or manually move
your stop loss in the direction of the trade.
Now, this is nothing groundbreaking but the amount of amateurs who don't do
this is staggering, and they wonder why they can't make money.
Trust us.
BENJAMIN GRAHAM
"The essence of investment
management is the
management of risks, not
the management of
returns."
THE REAL PROBLEM:
SETTING A CEILING
Traders are too eager to take a profit and set an
imaginable ceiling that is in fact LIMITING their profit
potential.
It is shocking when we get emails and messages about how amateurs trade and then
blame a system, the timing or anything else they can lay the blame on.
They do all the effort and then they set a target to take profit from Mr. Market, it either
reaches this level or it doesn't. Simple.
You want to become a better trader? Want to do exactly what professionals do?
Then stop setting a ceiling on your trading and start letting your trades ride for as long
as possible.
Again, zero effort required yet you can reduce your risk by locking in profit and
potentially double, triple or even 10X your profits.
HOW IT WORKS
As professional traders, the idea isn't about how often we can
trade to generate a return.
Imagine mining for gold, you know you'll find some and you say
you want to mine say 100,000 oz... However, you have no idea
how much gold deposit is below...
We can bet you wouldn't walk away until that gold depository was
depleted, right?
That's the same with the markets... Why set a target when the
market can take your trade on for as long as possible.
Instead of setting a simple stop-loss level and a take profit level You
can either do this in two ways:
2) Manual - This is where you set price alerts and manually move the
stop loss. This is beneficial as it gives you slightly more room to
work with the stop-loss and you can reevaluate the trade
every time.
Move your stop loss the same risk size following the profit. E.g) Risking 10 pips and moving
the stop loss in 10 pip increments. This way you keep the same risk as you lock in-profit,
making the first incremental at your breakeven point/trade entry level.
Or
You can set your standard risk parameter, but instead of moving the stop loss in the same
risk increments, you can decrease the risk straight away and choose a different amount of
pips to lock in.
Example) your normal stop loss is 50 pips, but once the market has moved in your favour
you want to trail the market by 25 pips, which is a 50% reduction in risk.
PRO TIP
To determine how much the price may go up or down in the timeframe you trade in
can be achieved by the Average True Range indicator. You can use this figure to
determine an appropriate trailing stop loss.
RISKS
Of course the risks are that you may get stopped out too early.
The quick fix behind that is to increase the pip range if you feel comfortable in doing so.
#1 BEST SELLER
Your capital is at risk. Losses can exceed deposits. Trading spot foreign exchange and futures on margin carries a
high level of risk and may not be suitable for all investors. You may lose all your capital. Losses can exceed deposits.
Past performance is not indicative of future results. The high degree of leverage can work against you as well as for
you. Before deciding to invest in spot foreign exchange or futures you should carefully consider your investment
objectives, level of experience, and risk appetite. If you are in any doubt about investment or the mechanics of such
products, you should seek independent financial advice.
If you purchase a commodity option, your capital is at risk and you may sustain a total loss of the premium and all of
the transaction cost. If you purchase or sell a commodity future or sell a commodity option, your capital is at risk
and you may sustain a total loss of the initial margin funds and any additional funds that you deposit with your
broker to establish or maintain your position.
If the market moves against your position, your capital is at risk and you may be called upon by your broker to
deposit a substantial amount of additional margin funds, on short notice, in order to maintain your position. If you
do not provide the required funds within the prescribed time, your position may be liquidated at a loss, and you will
be liable for any resulting deficit in your account. During certain market conditions, you may find it difficult or
impossible to liquidate a trading position. This can occur, for example, when the market makes a “limit move”.
The placement of contingent orders by you or your trading advisor, such as a “stop-loss” or “stop-limit” order, will
not necessarily limit your losses to the intended amount, since the market conditions may make it impossible to
execute such orders. The high degree of leverage that is obtainable through for example futures trading, options
trading, Spread Betting, Binary Betting and CFD trading can work against you as well as for you.
The use of leverage can lead to large losses as well as gains. This brief statement cannot disclose all the risks and
other significant aspects of the commodity markets, including trading shares, currencies, and stock indices. You
should therefore carefully study financial trading before you enter the financial markets with the view of buying and
selling, including shorting, securities in the market place.
Before deciding to invest in spot foreign exchange or futures you should carefully consider your investment
objectives, level of experience, and risk appetite. The possibility exists that you could sustain a loss of some or all of
your initial investment and therefore you should not invest money that you cannot afford to lose. You should be
aware of all the risks associated with spot foreign exchange and futures trading, and seek advice from an
independent financial advisor (IFA) if you have any doubts. All information posted on this website is of our opinion
and the opinion of our visitors, and may not reflect the truth.
Please use your own good judgment and seek advice from a qualified consultant or IFA, before believing and
accepting any information posted on this website.
CFTC RULE 4.41 – HYPOTHETICAL OR SIMULATED PERFORMANCE RESULTS HAVE CERTAIN LIMITATIONS.
UNLIKE AN ACTUAL PERFORMANCE RECORD, SIMULATED RESULTS DO NOT REPRESENT ACTUAL TRADING.
ALSO, SINCE THE TRADES HAVE NOT BEEN EXECUTED, THE RESULTS MAY HAVE UNDER-OR-OVER
COMPENSATED FOR THE IMPACT, IF ANY, OF CERTAIN MARKET FACTORS, SUCH AS LACK OF LIQUIDITY.
SIMULATED TRADING PROGRAMS IN GENERAL ARE ALSO SUBJECT TO THE FACT THAT THEY ARE DESIGNED
WITH THE BENEFIT OF HINDSIGHT. NO REPRESENTATION IS BEING MADE THAT ANY ACCOUNT WILL OR IS
LIKELY TO ACHIEVE PROFIT OR LOSSES SIMILAR TO THOSE SHOWN.
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