Trading Price 8: Trade Management Tactics

Question 1

What is trade management

Answer 1

How a trader will manage (trade actions) before, during, and after a trade this includes, but not limited to a trade set up, position sizing, using fixed targets, adjustable exits, and combo exits. trade management zone is between when you open and close a position Proper trade management is having a rule based trade mgmt strategy that is pre set, before you place the trade.

Question 2

5 common bad habits of trade management

Answer 2

1. sloppy position sizing a) too much size = greater risk b) too little size = less profit c) correct position size allows you to maximize profits while keeping the risk at a minimum. Most efficient and effective use of captial 2. getting out of the trade too early 3. not letting profits run 4. moving a stop up/down too soon (fear of losing money) 5. letting emotions get the best of you

Question 3

Trade management: 3 things to do before the trade

Answer 3

1. ID a high quality trade set up from your trade plan 2. ID your entry, stop, exit 3. Position size correctly then place trade

Question 4

Trade management: before the trade 1. 3 things on how to ID a high quality trade set up from your trade plan

Answer 4

a) HTF uptrend, b)ITF demand zone, c)odd enhancers, etc.

Question 5

Trade management: before the trade 2. ID your entry, stop, exit figure out reward to risk ratio

Answer 5

a) I will buy @ $50, stop @ 49.75, 1st target @50.82 b) Reward to Risk Ratio = 3.5:1

Question 6

Trade management: before the trade 3. how to Position size correctly

Answer 6

a) if Account size @$100,000 b) The Allowable risk amount is @ 0.5% of account ($500) (for starters) c) entry to stop amount = $0.25 d) Maximum position size = $500/$0.25 = 2000 shares

Question 7

Trade Management: During the trade 4 examples that factors in trade

Answer 7

How you manage the trade AFTER ENTRY will determine your profit potential Many Factors are involved such as: 1. Fixed Targets 2. Adjustable Exits 3. Combo Exits 4. most importantly: Your own psychology

Question 8

3 ways to manage own Psychology

Answer 8

1. Discipline - don’t look at profit/loss - Set and Forget it 2. Follow your rules/Plan 3. Not letting negative emotions dictate your trading decisions

Question 9

Trade Management: During the trade 4 Fixed Target advantage

Answer 9

ADVANTAGE - focus set/forget no babysitting great if you work another job

Question 10

Trade Management: During the trade 3 Fixed Target Disadvantage

Answer 10

DISADVANTAGE	- Limited profit	price doesn't always hit your target	need to know how to place good, realistic targets

Question 11

Trade Management: During the trade Adjustable Exit 1 advantage 3 disadvantage

Answer 11

ADVANTAGE - more profit DISADVANTAGE usually need to babysit must have great discipline must know when to use it (don’t use in sideways market!) only in up or down trend

Question 12

Trade Management: During the trade 1 Adjustable Exit advantage

Answer 12

ADVANTAGE - more profit

Question 13

Trade Management: During the trade 3 Adjustable Exit Disadvantage

Answer 13

DISADVANTAGE usually need to babysit must have great discipline must know when to use it (don’t use in sideways market!) only in up or down trend

Question 14

Trade Management: During the trade 2 Combos advantage

Answer 14

ADVANTAGE excellent confidence booster most flexible style

Question 15

Trade Management: During the trade 2 Combos disadvantage

Answer 15

DISADVANTAGE must have strong discipline not all market can use this - don’t use in sideways

Question 16

which is more important: higher winning % vs higher profits

Answer 16

higher profits

Question 17

higher profit preset plan

Answer 17

once price reaches 2:1, move stop to break even. once price reaches 3:1 take profits downside this reduces risk but also may reduce the probability of meeting profit target