The perfect trade

The perfect trade

We have identified resistance created by a previous area of support on our chart.

We have also identified a possible area of support further down the chart as our possible target.

We then enter a trade at £2 per point, we also enter our stop loss of 10 points.

The trade starts to move in the right direction.

We are now in profit by +15 points and decide to move our stop to breakeven and lock in a free trade by moving our stop loss to breakeven.

We are now in profit by +25 points and decide to trail our profit by moving the stop to +10 points profit and exiting half the position.

We have just locked in +10 points of profit, we are in a free trade and we will trail the trade down to the target area by keeping our stop loss 15 points behind the market price.

Our trailing stop loss gets hit and we have locked in another +20 points of profit.

As you can see it is a well thought out and managed trade that enables to trade in a relatively risk free manner... One can enter a trade but without trade management your trades will never reach the full potential.

Entering a position is fairly easy the whole trade depends on when you exit. Do focus too much on the entry position, as long as you enter according to you defined setup rules such as shorting at resistance or buying on support.

Focus more on the management of the trade you have entered such as trailing the market to lock in profit and having multiple runners so you can exit in halves (can exit at a target and then trail the rest) or even quarters at pre determined points..

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