Changing the stops to break even as a trade risk management strategy

Some of the traders don’t like it, most of the traders us it and it is one of the best strategies to increase your win ratio.
How many times did you encounter the situation – should I close the trade or should I leave it for the target? And you left the trade open to reach your target and is on a half way to it, but suddenly the price is reversing and you are now watching your profit is decreasing. After a while you are in a loss and you are close to your stop loss instead of your take profit target. You are now saying to yourself why didn’t I close the trade? Simply your emotions where in control you wanted $500 of profit instead of $250.
How can you force yourselves to keep your profit and reduce the risk of losing? Moving the stops to break even entry price and possibly taking the half of the profit from a trade will increase your win ratio and it will force you to keep your emotions during the trading in control.
Recently we published a trade alert for our premium members to trade the USDNOK pair:

“RECOMMENDED SL 8.0674

RECOMMENDED TP 8.3590

USDNOK BUY ORDER

USDNOK bought at 8.14771 Recommended lot size 0.50

Our trading sizes are based on a 50k account. You can adjust the size of the trade in line with your risk. Buying the pair on the intra-day wedge break above the 8.1400 and USD&OIL combined strength. This is like USDCAD long position.”

USDNOK trade risk management strategy

After two days we have closed half of the trade size 0.25 with a $300 of profit and we have changed the stop loss to 8.14771 which was our entry price as you can see on the chart.

USDNOK trade risk management strategy

This gave us now the risk free trade. We did collect the profit before our initial target 8.3590 level on the half size of the trade, but we reduced the risk of not getting anything from this trade because the price action reversed from the 8.2580 level. This is now a winning trade, with the zero risk, and we have $300 of profit from it. 
With this example we wanted to show you an importance of trade monitoring and risk management. By opening the trade and placing the initial stop loss and take profit target the job is not done you have to manage your open positions all the time, especially in the Forex market and swing market trading environment. Also this technique will help you to manage and control your emotions in trading.
We hope that this article was helpful! (click on the chart to enlarge it)
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