Here you can find some tips about trade management on how to be a trader on a long term. Risk management and trade management are all parts of trading strategy that define you as a trader. Every successful trader prefers a certain trading strategy, and you are sure to find your own, but in order to inspire you, here is what many long traders do, but the method presented here can also be used by any type of trader.
When there is a clear direction in a trading session, you will find this method being used even by the huge futures traders with who operate with thousands of lots and who have huge capital.So, if someone believes that a certain pair is going to rise at the start of a year, the graph shows him the movement of the pair rising throughout the period of time.
That is the situation where anybody would want to buy as low as possible and to sell as many as possible. But, where the line will go, nobody knows. Where is the low, where is the high, it can’t be known until the line reaches the top and the bottom.
The setup presented here is the simple sort. All in all out system makes those with ¸one position have only two options, getting a target or a loss. What is important here to know is how to collect and cut the exposure in the market. The point anyway is to buy at the lowest possible position. After the purchase, you wait and see where the market is going. It is possible to secure your investment with positioning lows during the time as the value of your asset rises, but you want to make sure to sell when others want to buy and that the market responds well in your favour. That moment is when you see other traders starting to go to your side, the first sight of the value going down. It might seem that the low you bought it for wasn’t the lowest, but it served you well for now, and you are going to repeat that again. This basically means that the shares you bought for “your” low and sold them when they were higher than low, but not maybe as high as they went up after you sold them – it is still making you profit, and you keep your positions, and that is what this system is all about.
After you repeat several of these successfully, you won’t be far ahead of the starting point, but you are now stabilized and prepared for another round, and by this time you shook the market a little bit and thus prepared it for your next move with strategically placed positions, so when you strike, you do it from various points. That’s the way you collect and cut until you climb to a point of breakthrough.
Successful traders won’t show their path of trading until they collect their positions, after that, exposure will bring traders to their side and thus affect the market. Then, the successful traders, such are you, take benefit of that position.
In order to follow the trend by collecting and cutting, you can have add positions during the process, and if you see market going against you – cut it right away. Don’t wait to be totally blown off.
Always use a positive averaging, and never use negative. Using a positive averaging directs you to doing things with small positions, rather than wasting your capital immediately.
What to do when you lose it all?
First thing to know is that you have to keep it calm as after you had lost it all, there is nothing more to lose, so you don’t have to worry (unless you furthermore catch a cold or some disease). Don’t come back instantly. Since the market beat you, you probably want to take some rest. Assume that with your money you lost your strength as well.
What doesn’t kill you makes you stronger. That is the case here as well, but you have to make sure what that was before you get back. Make sure that you saw exactly what mistakes you made. Try to get an advisor who will point out your mistakes and maybe even try to work with one for a while. This is all before you get back. And to get back, you need money.
Where to get it?
If no source comes to mind, here is something that makes lots of sense; participate in a trading content. Many brokers have these sorts of contest where you can enter for free and depending on each broker, you can get real cash, or turn your demo account into real or something like that. The point here is that if you can’t win on a competition, why bothering with real money?
Another possible source depending on your overall skills and on what you had learned from your losses, also if you ensure to be better next time and your loss was almost evaded, you can get some investors. If you convince people after you learn from your mistakes that you can do well, you fill surely find people who would want to engage you as their money manager.