Samstag, 1. November 2008

the 2 strategies *manage* and *exit*

I allready explained how i get into the trade.
So here is how i manage and exit the trade.

After getting into the trade i manage my position and trail my stop in an absolute simple way above every of the following candles in the respective time frame.

My initial risk (1R) is the same as my fixed target (1R).
While managing my position i reduce my initial risk while
my fixed target is comming closer and closer.
Once the price reached my fixed target, i´m out of the trade.

best case: the trade goes in my direction without looking back and gives me 1R.
2nd best case: the trade takes more time then expected, i´m able to reduce my risk with each new candle at get the stop lower then my initial risk was. this way i reduced my risk reward ratio over time.
worst case: after getting into the trade i get immediately stopped out and lose 1R.

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