Trade management solutions for day traders
1. You are too selective on your trades, meaning you miss opportunities.
Trade a smaller size to reduce your risk & increase your comfort zone, so that you are prepared to execute more trades.
The more trades you can execute allows you to build experience & confidence.
Traders must build a data set of trades to build an understanding of their strategy. Once you have 100 trades executed you can start to analyse your strategy & fine tune.
2. Stops are too tight, so too many trades end in losses.
Trade size is too large, so losses are too big. This makes you hesitate with future trades.
Trading in a size that is too large for your comfort zone usually means that your stop is too tight because you are trying to balance limiting losses with being too greedy.
This means your stop is too close to your entry point because you don’t want to lose a lot of money but you do want to make a lot of money.
So you use a very tight stop in the hope that you can pick the exact turn of the market.
Solution: Decrease your size, giving yourself some room for the trade to work, which is likely to increase the percentage of trades that work.
3. FOMO – Chasing trades – Jumping into a trade before the support or resistance entry level is hit, because you lack patience!
You must be prepared to miss a trade by a couple of pips.
It happens to the best traders but they move on to the next opportunity.
Chasing trades ensures your stop loss order will be too wide from your entry point, or is in the wrong place.
For example if you have bought too far above the support level, your stop is going to be too close to that support level,
so you risk being taken out of the position at the price point at which you should be entering.
Solution: It will happen. Accept that you will miss trades by a small margin. Move on to the next trading opportunity.
4. Exiting winning trades too soon because you fear losing the accumulated profits from the open trade.
Getting out of trades too early – making less profit than you were prepared to risk losing.
Solution: Set sensible targets before you enter the trade & stop trade watching!
You planned your trade before the entry, so be patient & trade the plan.
Use trailing stops to protect profit & take partial profits if your anxiety rises as your profits increase.
5. Varying trade size which risks losing more on one trade then you will make on another.
Solution: Risk the same amount on every trade.
I find that I am always surprised at which trades do & do not work.
6. Not taking profit and running the trade too long.
Solution: Set sensible targets before you enter the trade & make sure you stick to them.
Profit taking allows you to move on to the next opportunity.
Nursing winning (or losing trades) for too long stops you benefitting from the next profitable opportunity.
Successful traders keep collecting small amounts of profit, by executing low risk trades but overtime they build large profits.
They do not get rich on a few trades. They do not get rich in weeks or months. It takes years!
Plus, our signals are backed by detailed chart analysis and explanations, so you can understand the reasoning behind each trade. Earn while you learn!
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With almost 40 years experience, Jason Sen began trading his own account on the floor of the London International Financial Futures Exchange at the age of 19, in 1987. He spent 15 years specialising in market making interest rate and index options on floor then moved on to trading forex on screen at the turn of the millennium. He is also recognised as a skilled technical analyst developing this expertise for the last 20 years.
His extensive trading experience from the LIFFE trading floor to screen trading and deep understanding of technical analysis give him a thorough understanding of the financial markets and the factors that drive them.
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