Famous statement of G. Soros: "It's not important to be right or wrong, the main thing is how much you earn when you're right and how much you lose when you're wrong."
First, we need to talk about the exit command. It is a stop order used when you want to exit the market.
When entering a buy or sell order, you need to place an additional pending order to exit in the opposite direction. This order acts as a "fuse" to protect your account, so it is called a stop loss order. It limits the maximum loss of the newly opened position if you misjudge the market.
When the price runs far enough, you can move it to the breakeven level to keep the position from losing money, called a break-even stop order.
Once the price has completed its pullbacks, you can move it along the trend to protect partial profits, called a protective stop order.
At the target price range, you can move the order closer to each candle. At that time, it plays the role of a take profit order.
When the price has not run far enough (depending on the context), avoid rushing to move the cut order to the breakeven point because market fluctuations can sweep past it.
Second, identify risks before entering orders. Determine where to place the initial stop loss order:
You need to remember that stop loss orders help protect your account, but they also need to be protected. Stop loss orders are often "hidden" behind important price levels such as upper/lower resistance levels, trend lines, wave highs/lows, candle highs/lows. These prices are selected depending on the trading time frame and trading wave level (main wave or secondary wave).
If the initial stop-loss order placement is too far away and the calculated risk is too large compared to the normal level, you can reduce the trading order volume or patiently wait for another better opportunity. In fact, this risk assessment also involves the element of probability when judging the direction of the market and cannot be applied mechanically.
Third, reduce risks, keep profits. The act of moving the stop loss order in the direction of the wave or trend is a way to gradually reduce risks and retain part of the transaction's profits. Note that you should never move a stop loss order in the opposite direction or cancel it.
The break-even level is a psychological level that is often very important to most people. When you move the stop loss order to this level, you have the feeling of "letting go of the burden", so this action is very attractive. Therefore, you need to be alert to make reasonable breakeven orders, based on clear signs, not due to fear or anxiety. Remember to keep enough distance for the market to "breathe" when moving.
You can proactively move your exit order in the direction of the price to reduce the risk when you see the price enter a resistance zone and an abnormal signal appears in the opposite direction or the pattern lasts too long (likely to fail) or when it is about to exit. important news. Exit orders should be moved sequentially following waves, candle tops/bottoms or placed behind key price levels that the new market creates.
Fourth, take profits. If initially you decide to only ride one wave at a time, you need to proactively exit the order when the price is close to the barrier to avoid a rebound wave; If you decide to follow the whole wave, you have to accept going through the rebound waves. Lack of decisiveness can lead to exiting orders right at the end of the pullback wave, causing profits to disappear. Actually, there is no specific formula to take optimal profits for every situation, but there are a few situations for you to consider whether to continue holding the order or not:
If the previous resistance level is broken quickly and strongly, the direction is clear, the run is long and open, the wave will usually develop stably and hold for a long time.
If the price has just escaped the long-term accumulation zone (abundant wave energy), the trend will usually be strong and steady; But when most of the energy has been dissipated (degraded), it needs to be accumulated again and it is difficult to go further.
When the wave pauses and there appears a signal to reinforce the wave (trap, failed bottom/peak fishing) while the forecast levels and hard resistance levels are still relatively far away, the market is likely to continue its direction. .
These are great shares that I have collected and hope to help you manage your trading orders better and earn more money. Thank you everyone for watching the news. Remember to follow the feed to receive valuable knowledge.
