Simple Trade Management Tricks Every Trader Needs!

0:00 So good afternoon traders and in today's video I'm going to speak about trade management and the misconceptions that are often preached online about how to manage your trades. The difference between effectively managing a position and managing a position that eventually will lead to a loss of profits in the long term. When we are managing a position, the way that I see it is that that trade is no longer going to make full take profit and you're using your data for the past however many years you've tested to effectively make decisions in real time. You can't make a decision in real time based on what you

0:46 think is going to happen. You also cannot make a decision based on the numbers on your MetaTrader or your C trader. This is just not a viable approach towards trade management. And if you are looking to manage effectively, then be sure to stay until the end of the video so you hear everything I have to say about trade management. I have probably tested every single way to manage trades that I know of. So, I have clear evidence for my strategies and for traders that I and for traders that I know personally that everything in this video is backed by evidence. I'm not going to give you certain ways of managing trades if I know it doesn't work because then that would be very pointless. So, we're going to start with a very very simple way to

1:34 manage trades and it's the most effective way I've actually seen from my own results. And this is assuming you are trading based on trends. If you're trading different styles of trading, scalping, maybe swing trading, this could uh differ from the way I'm actually going to tell you. But if you're in a buy, you are following the trend, price has retested down, you are entering a long position, you obviously want to see price maintain that bullish structure. And if that bullish structure is not maintained, you want to be out of the trade. And the beauty of actually having a management technique for this is that it can be tested very very simply. If you have collected your data and you have maybe

2:19 screenshots of your previous setups, you can quite easily go through and see out of my 300 out of the 300 trades that I've tested for this strategy, how many of those trades had broken structure in the opposite direction before going to full stop-loss. How many of those have broken structure in the opposite direction and then gone to take profit? And if you can actually tally these up, you can quite quickly see the difference between closing a trade early based on a structure shift versus holding the trade no matter what for stop loss or take profit. And these are two ways you can actually look at it. The best way to actually collect this data is okay, I'm in a long position, price is let's say

3:04 50% towards my stop loss, but now we've closed below the previous structure. with a candle close. So now I'm looking to close the trade and that obviously means your loss is cut in half. If you're able to cut your losses down by 0.1% per per loss to even 0.5% per loss, this is going to increase your profitability massively. The main reason why this is the best way to to manage your positions is because if that trade based on data will end up losing anyway. and there is a very very high probability that that trade is going to lose then why would you want to risk your capital for the chance of a very very slim chance that that trade does end up

3:49 winning. The way to actually calculate this you look at the trades that have hit stop loss after breaking a structure and then you count how many trades actually hit a profit after breaking a structure. And if you see a huge discrepancy between those two numbers, then it is quite clear to you that it is a good management decision to actually make. If the stats are in favor of the stop- loss hit, so more stop losses hit by, you know, a massive amount, then it's probably most profitable way to manage your positions. And this is something that I do. If price breaks structure in the opposite direction, I am out of that trade. The main benefit of this is that you can reduce your loss size massively. And if you're able to keep your win size the same, so your

4:34 average win, let's say 3% profit, but instead of having an average loss of 1% every time, let's say you're able to get that down to 0.6%, 0.7%, or even down to 0.5%. It means that on an average loss you take, you're only losing half of what you used to to lose. So let's say out of 10 losses, on average, you're losing 0.5%. we're now only losing 5% instead of 10%. But obviously if you have 10 wins, you're still making 30%. It's not like you're compromising a risk-to-reward. It actually gives you a bigger buffer draw down wise to then increase your risk to further uh your upside potential on your on your account. And another way to actually manage your positions, again, one that is backed by data. Everything that I will say on my channel is usually backed

5:22 by data. So, this is if your trade has been open for too long. And an easy way to put this into perspective, let's say you've opened a trade at 9:00 a.m. And if you look back at your data, your duration of your trades, you can compare the duration of the winners versus duration of the losers. So, you can see if I'm in a trade for more than 5 hours, what is the chance based on data that this is still going to win or about past 7 hours? Maybe all your wins are within 3 hours and then after 3 hours you only have a 10% chance of winning that trade. Then you can add a filter after these 3 hours have actually passed by. I'm going to close a trade because

6:08 you know based on data that that trade is no longer going to win or it has a very very low likelihood of hitting your takeprofit. Just simple things like this to increase your profitability. Reduce trades that aren't going in your favor direction. Because when we are entering trades, when I'm entering trades, I want to see reactions fairly quickly. Majority of my wins are very, very quick. Majority of my losses are very quick. But when a trade goes on for too long, there isn't enough volatility pushing price down or up to my desired uh take-profit level, then to a certain extent that trade can no longer be valid for me. The last way to actually reduce your losses and increase your profits is to not trade news. Very, very simple

6:53 management decision. Do not trade news. Close before the news. Check the calendar every single day, every single time before you enter a trade. Is there a news release? Is there a press conference that's actually going to affect the result of my trade? The reason this is important is you don't want to have slippage. It could be good slippage that is obviously a possibility, but the downside slippage is obviously not worth the risk. based on my experiences, based on other traders experiences that I've actually seen and been a witness to, it just is not worth the pain and the hassle of being in 3% draw down from one trade or 4% draw down because you know you're trading with a large lot size or you're

7:40 overrisisking. It just can worsen the blow if you are then slipped on that trade. So, not worth the risk in my opinion. Just close before news. You can look at your data and see maybe you're trading a higher time frame. You can trade news. When I was trading a 4-hour time frame, I was trading news all the time because it didn't affect it. If I had a 200 pip stop loss, there was no news event that could slip me unless I'm already within the close vicinity of my stop loss. Uh but that is usually a disaster at that point anyway. So, the reasons why you might not want to manage your positions are also very simple. I have taught countless traders how to trade. I have a mentorship group and I see the decisions that people are making in their live trading. They post their charts in the

8:25 the group. They talk about their trading experiences. So, I am witnessing basically firsthand live trading from hundreds and hundreds of different people. And what I've noticed is that traders who try to manage positions by staring at the charts for hours and hours and hours while their trade is open in front of them, they mismanage their positions. I have been guilty of this in the past too. in my early days in trading, probably my early few weeks or months as well, but definitely within the early days when you are in a trade, you're going to be on your phone having met Metatrader open and you're going to want to see the fluctuation of your profits or losses. And seeing these numbers go up and down, especially if

9:11 you are trading a larger account that you're probably not used to seeing those sorts of numbers fluctuate, it can be difficult. It can lead you to make emotional decisions in your trading. So, for the vast majority of people watching this video that don't have the copious amounts of data to actually make management decisions from, you're better off just not managing your positions at all, apart from news trading. If you have no data to back up your management decisions, just focus on closing before news and that's it. Perhaps you could close before the evening rollover. Again, something that you can consider, but don't make decisions. Don't close early just because I've said something if it is not supported by the data for your individual strategy. Data for mine

9:57 might differ from data for your strategy. So be mindful of this if you are going to close trades early. And just know if it is not backed by data, then you have no clue what the outcome could possibly be in the live markets and for any future trades. Just like in any single trade we take, we do not know the potential outcome. All we're doing is trying to increase our probability longterm of making a profitable strategy by limiting our loss size and increasing our win size. That's the ultimate goal. And if you guys did enjoy, like the video and I'll catch you guys in the next