Module 10: How to Take Profit and Manage Trades

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LESSON: Profit Taking and Trade Management

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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”]Trade management is a key skill that many traders fail to recognise and enhance their skills in. This is the same reason so many traders fail to make consistent profits.

Many times when a trader is in a trade they will watch their trade move into a nice winning position. Then price will turn as if it was magic and that same winning trade will end up stopping the trader out for a loss.

Was this magic or could the trader have managed their trade more efficiently? Of course they could have managed their trade better, because nothing the Forex markets do is magic.

Anyone can place a winning trade. I could flip a coin and place a winning trade 50% of the time, taking out the spread and commissions.

Plan the Trade and Then Trade the Plan

What I am getting at is that picking the correct direction of the market is not where the money is made or lost and even a monkey can place a winning trade once or twice, but to make sustained profits it takes a skilled and educated trader that understands the markets and can manage their trades consistently overtime with a clearly defined strategy to make a profit.

Often the same area that turned the around from a winning position was a Support or Resistance area or zone they either failed to recognise it or were too greedy to respect it.

Before we place our trades we must make our plan. We do this before entry because when money is on the line our mind thinks differently and we make different decisions. Our choices and decisions are always better when not clouded by the subject of money.

It is so much easier to make a plan before we get into a trade and then just follow this plan then to get into the trade and then make it up as price is moving and our account balance is moving up and down. If we set our plan before entry, then all we have to do is follow the plan. We are not dictated to by our account balance or by what price does. We just execute.[/text_block][/op_liveeditor_element]