Article Trade Management Q&A

[T2W Bot]

We can spend hours searching for the perfect pattern but fail miserably when its time to turn opportunity into profit. As it turns out, most traders do a poor job managing positions, regardless of experience level.
I?ve received hundreds of questions about this subject over the years and have complied them into a Q&A to help you make the right choices during the trading day.
Q ? What time-frame charts do you use in real-time?
A ? I track daily, hourly, and 15-minute charts for all my setups and positions. I don’t look any other time frames, except for an occasional glance at the weekly charts. This arrangement doesn?t change with liquidity, sector or any other variable. I watch these charts simultaneously on three screens, so I don?t have to toggle back and forth.
Q ? Should I trade with limit orders or market orders?  Does it matter whether it’s a buy, a sell, or a short? Do you use mental stops or physical stops? 
A ? I trade through a direct access interface and use limit...

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[Rhody Trader]

In this article, Alan Farley answers some of the questions he gets asked frequently in regards to trade management.

 

[Tuffty]

"I’ve never placed a market order on a short sale, and don’t recommend it under any circumstances."

What is the reasoning behind this?

 

[FXSCALPER2]

I run for cover whenever someone mentions tight stops. This is, frankly, a very stupid suggestion. I trade FOREX and one thing that really pisses me off is gurus talking about tight stops. Tight stops are like buying a lottery ticket. I never understood people who try to trade Cable with a 30 pip stop, for example. You will get stopped out all the time.

The other overrated nonesense is r:r ratio. This has zero relevance to whether you will succeed or not. if someone goes for 100 pips witha 30 pip stop, his r:r is better than 3:1. What about his odds of being stopped out? I would rather bet on someone who uses a 100 pip stop and a 30 pip profit target.

 

[wasp]

I run for cover whenever someone mentions tight stops. This is, frankly, a very stupid suggestion. I trade FOREX and one thing that really pisses me off is gurus talking about tight stops. Tight stops are like buying a lottery ticket. I never understood people who try to trade Cable with a 30 pip stop, for example. You will get stopped out all the time.

The other overrated nonesense is r:r ratio. This has zero relevance to whether you will succeed or not. if someone goes for 100 pips witha 30 pip stop, his r:r is better than 3:1. What about his odds of being stopped out? I would rather bet on someone who uses a 100 pip stop and a 30 pip profit target.

Not read the article yet, but in reponse to your post, I am completely on the opposite of your opinion there. Tight stops and R:R with 30 SL and 100 target is a much better strategy IMHO.

 

[sjalmond]

Risk and Reward

I'm with FXSCALPER2 on this - people shouldn't reject a system on its R:R ratio alone. I'm much more interested in a system's Expected Outcome and Volatility. I don't care what the R:R ratio is, as long as the Expected Outcome is positive and I can afford the Expected Volatility.

 

[wasp]

I'm with FXSCALPER2 on this - people shouldn't reject a system on its R:R ratio alone. I'm much more interested in a system's Expected Outcome and Volatility. I don't care what the R:R ratio is, as long as the Expected Outcome is positive and I can afford the Expected Volatility.

With 30 TARGET and 100 STOP:

3 wins = 90
3 losses = 300

I know what I'd prefer...