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?

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Philip Teo

Founder & CEO at Traderwave Pte Ltd
Philip Teo is an entrepreneur, speaker and trading coach who specialises in the field of Technical Analysis of the financial markets. He is currently the Founder and CEO of Traderwave Pte Ltd, a financial technology company that offers a web charting application to global traders. He has conducted many trading seminars and appeared on national television before. He is also currently an official speaker and trainer with SGX Academy. Learn more about him at his Google+ Profile, LinkedIn Profile and Facebook Profile

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