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Trade management

  • #1
  • First Post: Jul 20, 2017 1:55am Jul 20, 2017 1:55am
Hello and a nice day everyone!

I have thought about set stops to breakeven or closing Parts of positions in winning trades.

For Me both makes no real Sense.

Okay set stop to breakeven ro protect for further loss but the winrate will also decrise alot.

In my opinion set and forget is nice but there musst be something better. But I dont have found it already.

The worst thing for me is, what often guys told me. At 1/1 set stop at breakeven and let 1 Position run. The Problem i have with that is simply, when I get a loss every Position will hit the stop loss.
No one never has taked about scaling out. I think thats an important part when you want trade like that.



If anyone has a good idea or critic is welcome. I dont know if im wrong
Everyday better.
  • #2
  • Jul 20, 2017 3:38am Jul 20, 2017 3:38am
Are you a intraday or position trader?
  • #3
  • Jul 20, 2017 5:19am Jul 20, 2017 5:19am
Mostly intraday. Momentum tradIng
Everyday better.
  • #4
  • Edited 6:14am Jul 20, 2017 5:32am | Edited 6:14am
If you don't have experience with expanded trade management, i suggest you to move your SL with pullbacks and wait until these pullbacks go above your breakeven point to make it bulletproof. Also avoid to set your SL directly at the lows/highs of the pullbacks. Give it breathing room. Once it triggers your SL you can take profit. Also in trade management you need to stick to a system. Always use the full win potential of your positions.
  • #5
  • Jul 20, 2017 5:34am Jul 20, 2017 5:34am
Splitting your trades, the way I use it is more about practicality and psychology than anything. In theory you hold a position forever, and then take profit at 1000% profit. In practice you get impatient and take profit too early, unless you have already taken some. It gives you some flexibility to get out in pieces, and still have something run long term.
  • #6
  • Jul 20, 2017 5:36am Jul 20, 2017 5:36am
Setting S/L to break even is just logical. The price will eventually come back to any point, if you are holding something and you have breathing room, you don't want to take a loss on the position if the long term trade doesn't work out.

Before it gets there you will probably close, but if something happens when you are not available, you have that protection.
  • #7
  • Jul 20, 2017 5:58am Jul 20, 2017 5:58am
Quoting Catch-22
Setting S/L to break even is just logical. The price will eventually come back to any point, if you are holding something and you have breathing room, you don't want to take a loss on the position if the long term trade doesn't work out. Before it gets there you will probably close, but if something happens when you are not available, you have that protection.
I disagree completely. Setting breakeven stops is emotional, not logical. You are trading your P&L. If you have a positive expectancy, there is no reason to set a breakeven stop IMO. It's not about win rate, its about the size of your winners vs size of your losers. Your winners should always be much larger than your losers and therefore that makes your win rate largely irrelevant. Mathematically, scaling out and breakeven stops just reduce your max potential profits in the long run.
  • #8
  • Jul 20, 2017 7:04am Jul 20, 2017 7:04am
Quoting dkrock
Personally, I think moving a stop to break even at some point makes sense, although ideally you keep moving it. If you trade intraday, not sure why you are doing set-and-forget? I would develop some type of exit signal and then have it SMS my phone if I didn't want to actively trade. Of course that depends if your broker has software to put charts on your phone. Or, if you are at home, just add an alert and turn the speakers up. The exit does not have to be correct, but just a signal to notify you to check the chart because something has changed...
Yes, depending on your strategy using a trailing stop makes sense to me as well, eventually it will cover your entry point, but simply moving your stop to break even when it has nothing to do with the price action, but instead simply because you are in some profit and now afraid you might lose, does not make sense. Most often, you will get stopped out for a breakeven and taken out of the trade just because of simple volatility by doing this. This is a huge problem with many retail traders. They are more concerned with being right than making money.
  • #9
  • Edited 8:04am Jul 20, 2017 7:09am | Edited 8:04am
Quoting arlucad
Hello and a nice day everyone! I have thought about set stops to breakeven or closing Parts of positions in winning trades. For Me both makes no real Sense. Okay set stop to breakeven ro protect for further loss but the winrate will also decrise alot. In my opinion set and forget is nice but there musst be something better. But I dont have found it already. The worst thing for me is, what often guys told me. At 1/1 set stop at breakeven and let 1 Position run. The Problem i have with that is simply, when I get a loss every Position will hit the...
Pretty much every basic method has been discussed a million times. Scaling in/out, setting break even, martingale, anti-martingale, you name it it has been beaten to death but they never deal with one simple fact: When it is time to get out it is time to get out regardless of current profit/loss. The real issue with having an advanced exit is how do you assess what is currently happening because having a bunch of arbitrary rules using a bunch of horseshit indicators really does not mean anything since price does not respect what you project onto it.
  • #10
  • Jul 20, 2017 8:09am Jul 20, 2017 8:09am
When putting stop losses don't forget to take in account volatility of the particular asset you are trading thus, sometimes leave a gap between the breakeven and the stop/loss as IB's and big market makers often bet against private and small traders just to trigger stop/losses and gain profits because they have the power to move the markets alone.
  • #11
  • Jul 20, 2017 10:44am Jul 20, 2017 10:44am
Quoting Madinvestor
{quote} I disagree completely. Setting breakeven stops is emotional, not logical. You are trading your P&L. If you have a positive expectancy, there is no reason to set a breakeven stop IMO. It's not about win rate, its about the size of your winners vs size of your losers. Your winners should always be much larger than your losers and therefore that makes your win rate largely irrelevant. Mathematically, scaling out and breakeven stops just reduce your max potential profits in the long run.

Why is logical not considering people's emotions? It's logical that we don't know exactly where the price is going, and that we should make sure that we don't turn winners into losers.
  • #12
  • Jul 20, 2017 12:19pm Jul 20, 2017 12:19pm
Quoting Catch-22
{quote} Why is logical not considering people's emotions? It's logical that we don't know exactly where the price is going, and that we should make sure that we don't turn winners into losers.
Because emotions have no place in trading decisions. Trading is statistical and mathematical. You should trade your plan, not your P&L.
  • #13
  • Jul 20, 2017 4:14pm Jul 20, 2017 4:14pm
Quoting Catch-22
Setting S/L to break even is just logical. The price will eventually come back to any point, if you are holding something and you have breathing room, you don't want to take a loss on the position if the long term trade doesn't work out. Before it gets there you will probably close, but if something happens when you are not available, you have that protection.
Respectfully disagree. When you advance your SL, you're giving price less room to move, and your SL always kills a trade dead. In other words, if price retraces, hits your SL, then later reverses and moves 100 pips in the direction of your original trade, you've forfeited 100 pips that you could otherwise have had. That means that your bottom line for the year will be potentially 100 pips worse, a consequence of being too immersed in your current trade rather than looking at the bigger picture.

Conversely, if the trade subsequently moved against you 100 pips, then moving to BE was a correct decision, i.e. it saved you 100 pips that you would otherwise have lost. Hence it ultimately comes down to how knowledgeably you're able to view market conditions and levels, and decide what price is more likely to do. If you're completely unsure, then you have a 50/50 probability of success or failure no matter what you do, hence your trade management provides no real edge.

(Of course it's not quite as simple as that: at various times, price will be X pips in profit, or X pips in loss, from your entry point -- as the future gradually unfolds. But the underlying ideas are nonetheless sound).

That was one example. Every decision you make always has pros and cons, at least mathematically. For example, setting a wider stop will, on average, increase win rate, but make any losses that you do incur, bigger. Shooting for higher RR trades (if you think in those terms) increases average win size, but lowers win rate. Taking larger position sizes increases both return and risk in like proportion. Waiting for confirmation of a bounce can increase win rate, while attempting to anticipate a bounce improves RR (ask Chris Capre!). And so on. Whether the pros exceed the cons, or vice versa, ultimately comes down to your expertise in reading the price action, market sentiment, overriding economic drivers, or whatever your edge is. If you have no edge, you'll likely end up making decisions based on your P/L, hunches, emotions, ....... none of which the market pays any attention to.

Of course there are a lot of different ways of looking at this, but that is my view FWIW.
  • #14
  • Jul 21, 2017 12:47pm Jul 21, 2017 12:47pm
I agree that moving your stop loss anywhere at a random point is silly, but moving your stop loss to a point where you don't make a loss if something unexpected happens in the market is common sense (as soon as your price is moving in the right direction and you are behind some &R that will protect you from the natural fluctuations of the market).

You are going for a simplified version of the world, in the real world things happen on a daily, or even hourly basis that can change your probability of winning, and you must understand that you can't know what most of those are.
  • #15
  • Edited 5:07pm Jul 21, 2017 3:50pm | Edited 5:07pm
Quoting Catch-22
......in the real world things happen on a daily, or even hourly basis that can change your probability of winning, and you must understand that you can't know what most of those are.
That's true up to a point, but IMHO your comments reflect your current knowledge and experience.

I still contend that making decisions based on your P&L offers no mathematical advantage, for the reasons I gave. No analysis, no edge.

If you don't mind some bad language, watch the video in this post, from about 8:25 to 11:05. The presenter is Tom Dante, a very successful ex-prop trader. Admittedly he tends to enter near S&R points, making it doubly unwise to move his SL to BE, but this only serves to confirm that price behavior around these areas is not a total crapshoot.

Anyway, I don't want to get into a long debate. Let's just to agree to differ, if necessary, and leave it at that.
  • #16
  • Jul 24, 2017 11:11pm Jul 24, 2017 11:11pm
In Forex Trading you need to have certain skills like the risk management and money management, if you obtain it and if you develop it further, than you could be easily able to manage your trades.
  • #17
  • Aug 2, 2022 4:14am Aug 2, 2022 4:14am
Hi,

I am new to trading and I am having issues in managing my trades. Can some one help me with the following issues or let me know a thread on FF where i can find the relevant information:

1. I like to have pre defined Entry, SL and Target Profits (incl. partials). The problem is I can only manage the trade when I am available on the computer. Now, I can devote a good part of my day to trading but cannot sit 24 hrs. and so many times, it has happened that I lose good trades. Can some expert trader guide me on how to manage the trade even if it is not possible to sit all day/night long?

2. Can you please suggest a good trade manager for MT5 which can help me manage trades .i.e. trailing SL, breakeven, Target Partials, Pending Orders, etc.

Your Help would really mean alot!

Thanks in advance!
  • #18
  • Sep 27, 2022 2:40am Sep 27, 2022 2:40am
In order to have the efficient trade management, you should always keep an eye on the platform you trade. In addition, working with brokers that offer cutting-edge solutions will also help you resolve possible slippage situations faster.
  • #19
  • Nov 7, 2022 11:15pm Nov 7, 2022 11:15pm
Trade Management is really crucial one should must remember to move their stop loss if they want to succeed with this trade management practice.
Another thing to remember is to accept the result of the trade and move on. Once your stop loss or second take profit has been reached, do not re-enter your trade.
  • #20
  • Last Post: Nov 8, 2022 12:36am Nov 8, 2022 12:36am
One way to look at it would be (for simplicity)

*your edge wins you 7 out of 10 trades or 17 out of 20 etc

*your first trade of the sequence your trade moves into profit, you take off half and move to BE or free trade level, you hit TP

*your next trade is the same, you take off half and pay for the trade, you move your stop to BE, your stop is hit

*Your next trade hits your stop and the sequence begins etc etc

you are ahead of your edge
life is a reflection of what we allow ourselves to see
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