Cutting your risk, letting your profits run

AS the title goes,,...we all heard it many many times from the GURUS,,
But the online forex learning resources are much more deceptive,,i've seen many KICK_ASS complicated systems but no complicated/working money management systems except:"risk only 2-3% per trade"

As i already have a working system but still i consider that,
"the more you can let the winners run,,the more profitable trader you are."

WINNERS-LOSERS=PROFIT (loser is fixed but winner is variable)

see what are the benefits of letting the winners run:
1)Have bigger profits
2)minimizing trading cost(spreads/commissions)
3)prevents over trading
4)prevents you from getting in the sideways market too often
5)good for a traders psychology,less pain in the a**
6)fully utilizing the big trends(markets move hundreds/thousands of pips per week/month but how much u make??????)
7)u don't need to do analysis-paralysis on a frequent basis

Things i like to be discussed in this thread:
1)methods to cut your risk shorter
2)anything related to "risk management & position building"

If u are looking for a "HIGH-PROBABILITY SYSTEM" u can not do that,
If u are looking for a scalping/"peace of the mind" strategy,u can not do that

No one knows how much any market will rise or fall but that's obvious market only can go up or down so why do we need to search for perfect entry point??( rather than getting the perfect exit point to get the move as much as possible..)

95% peoples lose money because 95% of the strategies limit the winners.(at the end of the day,no one's going to ask u what u traded/what was your R:R/what was your accuracy but HOW MUCH U HAVE MADE?

I hope every like minded people will come forward with their thoughts..

I don't wish to hijack your thread, but along those lines, how do you determine what trades to "let your profits run" on?

After a several year hiatus from Forex, I recently decided to start working back into it. I have never lived off of my account, and as of right now, I am solidly in the red catagory of account increase. However, I have been working on my trade entry.

For the most part, I am currently working on a fairly reliable system that gets 5-6 pips, after spread most times, but there are other times that I've actually entered a trade toward the beginning of an intraday move (and obviously the other times where even the 5-6 pips is not reached).

There are times, where the market will move those 5-6 pips after a spread and then reverse. How do you decide that you are not just going for the pips you know you're most likely to get, and try to go for that major move instead of just hitting the limit entry?

Is this a case where your Money Management comes in to play? If so, is this an issue where, for now, I concentrate on getting just the 5-6 pips at a time, and then once my account is on more solid footing, use the 1-2% risk (or whatever seems comfortable) to seek out larger market moves?

Quoting tm9

Disliked

AS the title goes,,...we all heard it many many times from the GURUS,, .........

Ignored

Hi TM9


I have realized in trading as well as in life sound principles are often ignored.

To be profitable in this business all you can do is maximize your return ( let your profits run ) and minimize your risk ( cut your losses short ) as much as possible.

IMHO to minimize risk you need very low risk entry method(s) based on reliable market tendencies and a well-developed trading psychology.
Entry methods have to come from experience, so investing time and effort cannot be avoided, but can be made shorter and easier by having the correct set of beliefs which you seem to posses.

Well-developed trading psychology is the most difficult of them all from personal experience, however I believe a good way to learn this is from analyzing your trades in your trading journals.

Best Regards
YMFX

PS. I have never posted in this forum before, the title of your thread caught my attention.

I struggle with the aspects of letting profits run.nowadays I try to give my trades room to breath by checking my trades every 4 hours instead of 1....that is making a difference.

First off there are a few massive misconceptions that limit traders ability to make profit.

1. The market is random, there's no way to know what it will do...

rubbish.. the market is not random, it's chaotic. If you drop sand on the floor, where it lands will appear to be random, but drop a 1000 piles of sand on the floor and see if there is a pattern to the shape it makes. Chaos, random events that make repeatable, predictable patterns.
The market is exactly the same, remember people only have 2 options, buy or sell.... the same patterns will repeat over and over, the same on any timeframe, forever and will never change... fact! if you don't believe it you've lost already, forget trading, try something else.

2. I'm good at entries but I don't know where to exit.

Your entry if it is a technical strategy, price action or SR should be at the end of a move, or because a move has ended. So if you know how to read that then the exit is the same, or in other words your exit strategy must be for a technical reason, the exception is you could also make a strategy work based on money management and the risk model of your strategy, but you still need accurate data of your average reward to do that effectively.

3. The lower timeframes are just noise...

piffle... the lower timeframes are just a more detailed replica of the higher timeframes. The real truth is that lower timeframes have less power than higher timeframes, so we shouldn't expect an H1 SR to stop a daily trend.
Using multiple timeframes is by far the easiest way to ensure you hit the higher RR trades, as soon as you accept that scale works on markets and that the patterns are exactly the same from M1 upto monthly you will be able to make greater profits.

the irony is that all you really NEED to know is in the first "trading for beginners" book you bought, and most likely don't feature in your trading now years later.

cut your losses short,,sound like a cliche,,,but very powerful and reliable,,
I believe it,,
the question is;
how short ,,?
and when,,?
with a very long flying hours, you can feel which has high probability

Don’t be afraid to take a profit ,,,
Don't let good profit turn into bad losses,,,
difficult to determine the exact height or lowness how birds can fly

salaam

My main intention is not to debunk other peoples view but developing better exit strategy as good as possible...

1)If trading is not all about probability,then u don't need to use a stop loss
2)MTF is good for pin-pointing entries but the REWARD is also limited(the more the accuracy,down goes the R:R)


3)no way to predict if any S/R level will hold OR get broken.
4)i'll just say lower time frames are more volatile than the higher TFs

BTW,,there are 100s of forex strategies here in the FF,,can any expert guy show me a strategy having 70% accuracy with R:R=1:2 OR higher????

trading is just about probabilities

Reward is never limited unless you decide to limit it yourself

we have already agreed trading is about probabilities, wether SR will hold or not can be done with high probability

Lower timeframes can't be more volatile, if m5 moves 100 pip then h4 has moved 100 pips, no difference