Get smaller or get out.

Share This Post

Many times I get asked by new traders how to handle a certain situation they find themselves in when trading. These traders may have opened five or six mini lots in a trade and have seen the market move in their funded forex
direction. But now the market starts to move sideways or even move against them and they ask for help in what to do. My first question to them is what their plan was before entering the trade.
You know….before you had money on the line and could think clearly. First of all, if you are asking somebody else what you should do, this usually means that you have lost your way. When you have lost your way, the decisions you make are based on emotions rather than solid analysis. This is what can get you into trouble almost every time. When in this situation, there are two options….get smaller or get out. If you don’t know whether you are still bullish or bearish on your current trade, you should no longer be in that trade so you should get out. If you still want to be in the trade, but feel uncomfortable with the risk, you should get smaller.
This means closing part of, but not all of your position. Naturally, if you only opened one lot, this is not an option. But if you have multiple lots open, there is no rule that states that you have to close them all out at the same time. Closing part of the position locks in some of the profit. If you move your protective stop on the remaining position up to the breakeven level, which means moving it up to your entry, you are in the enviable position of having guaranteed a profit on the trade while still being able to further profit on a continuation of the move. That is good trading.
USD / CAD – Covering Position
As of this morning I don’t like what I’m seeing on the charts for the short idea. Although nothing definitive has come up saying that the downside potential is gone, it’s showing a momentary sign of weakness…for me that’s enough since I wasn’t looking to hold the position for more than 2-days. What I was ideally looking for was momentum to come in slamming funded forex downward for a day or two. I’d rather get out than risk a complete reversal to the upside in my face.
At best, if the downtrend remains intact it will allow me to get back short at possibly better prices. Right now, I was able to exit gracefully with a very negligible hit to the account. Now I’m ready for the next trade.
USD / CAD – Probe for Weakness
Following up on my previous post, I think it would be a decent time to throw in a probing trade into USDCAD at this point (at the time of this posting).
A probing trade is a very small position that by itself is relatively inconsequential if it wins or losses. But the great thing about a probing trade is that it gives you a better feel for what the market is doing because you have money on the line. Additionally, once we get confirmation that sellers are stepping back in we can build into this making it a bigger position with only a slightly worse average cost for the overall position.
I’d be comfortable adding to this position on a break below the .9743 level.

spot_img

Related Posts

Zooming to Riches: Where to Find the Fastest Paying Online Casinos

In the world of online gambling, speed is of...

Maximizing Wins: Strategies for Success on Situs Adatogel

Introduction Situs Adatogel offers a diverse range of online gambling...

Spin to Win: How to Make Real Money Playing lapan slot

Introduction Welcome to the thrilling world of online slots, where...

Embark on a Betting Journey: Fun88’s Captivating Offerings

In the ever-evolving landscape of online entertainment, Fun88 stands...

Shuffle Up and Deal: Dive into the Premier Hold’em Destination

In the realm of card games, few evoke the...

Language Solutions: A Closer Look at Translation Companies in the UK

In an increasingly interconnected world where global communication is...
- Advertisement -spot_img