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LESSON: When to Apply These Management Techniques

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[op_liveeditor_element data-style=””][text_block style=”style_1.png” align=”left” font_size=”16″ font_font=”Montserrat” font_color=”%237e7e7e”]Traders need to be very wary and SELECTIVE of when they apply these trade management techniques.

First support and resistance areas still need to be taken into account and adhered to. Support and resistance areas are what control the market and what the markets bounce off every session of the week and it is why we use them in our trading.

This is also why we use pre-trade plans.

It Goes Into the Pre-Trade Plan

However there are A LOT of situations where not only do other strategies come into play, but we factor these into the pre-trade plan before we enter the trade.

The best times to use the 2 Bar Stop and also the Inside Bar is when a trade that has gone a fair way in your favor and you have locked in your first chunks of profit.

Before going into your trade you will know exactly where your profit targets are going to be, exactly how many positions you want to have and if you want to use an extra position at end because there is space you see for price to move higher or lower into and you could manage with either price action or a 2 bar stop.

If space is not there for price to burst into and become a big running trade at the start of the trade when you are making your pre-trade plan, it is not going to somehow magically open up out of nowhere during the trade!

The other situation traders can use these trade management techniques to manage trades is as we just went through in the last lesson; when playing a breakout in a market that has been making extended highs or lows you may not be able to use previous levels back to the left as a guide and one of these strategies we have covered such as managing with price action could be used.[/text_block][/op_liveeditor_element]