As you can see very clearly from here, CJ didn’t have a plan on how he plans to take profit even before he entered a trade. This is actually a cardinal sin for new traders. Alright? The reality is that once you enter a trade, the market will move how it wants to move. You cannot dictate how the market wants to move, which means that there’s no way you can control how the market is going to move. The only thing you have control over is over yourself. It is extremely crucial, especially for generally new and inexperienced trader.
My suggestion is that you have to decide on your profit taking strategy even before you enter the trade. You cannot afford to just enter a trade and then you can, as and when, decide how you want to take profit depending on how the market moves. You will end up just having this kind of analysis paralysis and you have regrets. You have a lot of psychological burden on you, which will cause you to do all the wrong things. Alright? What you could have done right from the start, before you even enter this trade, is that decide on your profit taking strategy, alright?
If you would like to take profit based on a certain target or based on a certain R-Multiples make sure when it touches that particular R-Multiples or that particular profit target, you exit your trade. Alright? If you want to use a trailing stop, then you have to decide that what will be my trailing stop parameters be, alright? You have to decide right from the start. Once you get into a trade, then you decide whether to take profit at target or to do a trailing stop, it is going to be very, very terrible in terms of managing the trade for you.
Interested to receive mentorship opportunities like this with Philip?
Find out more at traderwave.com/innercircle
Latest posts by Philip Teo (see all)
- This is how you should place your stop loss level - October 15, 2019
- You must decide on your profit taking strategy before you enter a trade - October 12, 2019
- [SG Active Trading Tournament 2019] Challenge Other Traders In Singapore’s Biggest Trading Simulation Competition - October 11, 2019