by immy » 17 Oct 2022, 18:39
eaxh wrote: ↑23 Aug 2022, 12:31
immy wrote: ↑18 Aug 2022, 08:14
I always go for AT LEAST 5R and I manage my trade accordingly.
I never ever will give back 5R of profits. No, that's not how trading is done. Trading is all about risk management and managing drawdown.
If you're 4.9% up and you don't do anything about it, you're a dummy.
You should either lock in 1-2% of profit by moving your SL or close some part of the position to bank profits. That is called "risk management".
Giving back profits is also BAD RISK Management.
SL Move to Entry Level at +2 profit
SL Move to 1R at 3R profits
SL Move to 2R at 4R.
After that, you make the decision whether you want to allow this trade to run further or wait for 5R to be hit. IF price goes to above 4.5R and then turns around, I will not LET it go past 3R. I will move SL to 3R.
But there is one rule about this.
The Decision to Move SL is ONLY made at the CLOSE of the candle and based on the CLOSE of the price, not the spike.
In the picture below, SL is at 1R because price closed just over 3R. Notice that it almost touched 4R but that is just the spike. And NEVER make a SL move decision mid candle.
GREAT POST with clear exit rules. I have thought about if i change to 5R targets..But then i think.... WHAT IF it goes to near 5 R and then reverse. I would DIE (just a little)
SO, great examples there
Hi Emma
That was a really valid thought. Infact, suppose you have 1% risk and it goes t 5% in your favour and drops to BE within, depending on the prop firm rules, you might have violated the DRAWDOWN rule. 5% (equity drawdown). So it is important the we manage risk correctly. Professionals always manage risk. That is their MOST important skill and performance indicator. Ordinary , "wanna be star traders" like to risk 10% and go 50% drawdown. Those accounts BLOW UP. If you go for more than 3R you will have to have to have to have a way to Manage risk. And YES< trailing stop loss to lock in profits IS RISK MANAGEMENT. ... taking half at say 3R or 4 is Risk Management.
cheers
ps: I also move stop loss to Minus 0.5R at +1R profits. That means that since I have seen 1R profit, now I won't take a full 1R loss.
But that depends. If stop loss is too tight then I won't do that.
If Stop loss is say more than 1ATR (which is the normal ATR for that pair and time frame) then I might do this.
But if say I have a TIGHT TIGHT Seed, then I will wait for 2R for sure. Because I know that for this type of type stop loss, the risk of getting stopped out is high but the probability of BIGGER wins is also higher.
[quote="eaxh" post_id=37252 time=1661254317 user_id=2046]
[quote="immy" post_id=37208 time=1660806871 user_id=2]
I always go for AT LEAST 5R and I manage my trade accordingly.
I never ever will give back 5R of profits. No, that's not how trading is done. Trading is all about risk management and managing drawdown.
If you're 4.9% up and you don't do anything about it, you're a dummy.
You should either lock in 1-2% of profit by moving your SL or close some part of the position to bank profits. That is called "risk management".
Giving back profits is also BAD RISK Management.
SL Move to Entry Level at +2 profit
SL Move to 1R at 3R profits
SL Move to 2R at 4R.
After that, you make the decision whether you want to allow this trade to run further or wait for 5R to be hit. IF price goes to above 4.5R and then turns around, I will not LET it go past 3R. I will move SL to 3R.
But there is one rule about this.
[b]The Decision to Move SL is ONLY made at the CLOSE of the candle and based on the CLOSE of the price, not the spike.
In the picture below, SL is at 1R because price closed just over 3R. Notice that it almost touched 4R but that is just the spike. And NEVER make a SL move decision mid candle. [/b]
[/quote]
GREAT POST with clear exit rules. I have thought about if i change to 5R targets..But then i think.... WHAT IF it goes to near 5 R and then reverse. I would DIE (just a little)
SO, great examples there :D
:hug
[/quote]
Hi Emma
That was a really valid thought. Infact, suppose you have 1% risk and it goes t 5% in your favour and drops to BE within, depending on the prop firm rules, you might have violated the DRAWDOWN rule. 5% (equity drawdown). So it is important the we manage risk correctly. Professionals always manage risk. That is their MOST important skill and performance indicator. Ordinary , "wanna be star traders" like to risk 10% and go 50% drawdown. Those accounts BLOW UP. If you go for more than 3R you will have to have to have to have a way to Manage risk. And YES< trailing stop loss to lock in profits IS RISK MANAGEMENT. ... taking half at say 3R or 4 is Risk Management.
cheers
ps: I also move stop loss to Minus 0.5R at +1R profits. That means that since I have seen 1R profit, now I won't take a full 1R loss.
But that depends. If stop loss is too tight then I won't do that.
If Stop loss is say more than 1ATR (which is the normal ATR for that pair and time frame) then I might do this.
But if say I have a TIGHT TIGHT Seed, then I will wait for 2R for sure. Because I know that for this type of type stop loss, the risk of getting stopped out is high but the probability of BIGGER wins is also higher.