Simple Trade Management – Standing the Test of Time.

20 June 2016, 10:06
Muhammad Elbermawi

By Peter Brandett

I have absolutely no control if the next trade or series of trades will be profits or losses. However, with a proper Trade Management process, I know that I only have control over:

  • The patterns I identify as trading opportunities – do they meet a certain standard?
  • The orders I enter – is my order entry processes consistent with conducting trading as an organized business enterprise?
  • Leverage and sizing – (Risk Management) am I risking too much, but also, am I risking enough to make a trade matter if I am right?
  • Ongoing Trade Management – am I taking the right balance between protecting capital and allowing a trade to fully develop?

I want to be able to look at past trades on a chart a year or more after the fact (both entry and exit) and be able to say – “YES, that trade made sense, my sizing was right, my trade management was precise.” Picture this concept: If I blow up charts to wall-sized and stick pins into price bars at every spot where I bought and sold, will the placement of all the pins make sense a year after the fact? If I look at a pin and say, “I have no idea what I was thinking in that trading action,” then I have some serious issues I must address in my trading operations. Food for thought?

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