It is just as important to know if you are going well in an operation and go right to know is to be able to properly manage the course of it. Not everything comes down to an enter and exit. The right spot at the optimum, but there are a number of techniques that help us get the most out of the operation in the “for” and that every trader should know.
Specifically, today’s article we will see three very basic and common money management techniques during the course of an operation that will help us secure our profits. If the operation is positive for us: we will breakeven, the partial closing of positions and trailing stop.
The breakeven: at least you’re not losing
Often in this situation, a good move for us to price covers some good options that could augment our own comes the time when this movement turns around, reaches our stop loss and left with loss in an operation that could have been positive.
The breakeven technique consists of security that an operation has moved in our favor and not assuming a loss for our account. That is automatically on most platforms indicating the precise moment when the stop we want to move our point of entry, keying in our favor pips must have traveled the price for that to happen.
That is, if the price moves 15 pips in our favor, ordered the platform to place our stop loss 10 “negative” pips below the entry exactly at the entry price, known as price or breakeven point in that my operation is neutral (actually, we lose spreads).
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The partial closing of positions: Ensuring benefits
Another strategy that can also be followed to mitigate the above-described circumstances, and will also possibly carry out parallel to breakeven. It is the partial closing of positions that allow us to materialize benefits in our operation as it develops a our favor.
This is done by closing a certain percentage of it as the price is reaching areas that are strategic for us for some reason. Thus, if we come with 1 lot in the operation, we can close 0.5 lots to ensure the 50% profit when the price has moved 20 pips in our favor, others close 0.3 lots to achieve that resistance You can stop the movement, and leave the remaining 0.2 lots in the market if the price broke the resistance movement and initiate a trend in the same direction of my operation.
The trailing stop: Chasing the price movement with stop
As you may have deduced from the technique of partial closing of positions, although it is true that we ensure profits as the price moves in our favor, it is also true that with these partial closures are losing market strength to go diluting our position. Clearly, in the above example, in case of breakage of the last stand, it will not be within the same market with 0.2 batch to be the initial whole batch.
For this there is a technique for ensuring benefits go a winning position without having to give up our initial market exposure that is, maintaining the same batch which entered operation at all times: the trailing stop.
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The technique involves trailing stop moving our stop going in the direction of the operation as the price is developing in our favor. As in the previous cases, this is a technique that can be automated in most trading platforms. Simply specify how we want to pursue our stop price every 15 pips price moves in my favor, climb the stop 5 pips to ensure that profit if prices turn around, for example.
We must be aware that the trailing stop price will decline in prices and skip the stop if we see fallen operation. It is essential to take the pulse of the currency pair being operated and work with a trailing stop that way it gives enough air to price movements to develop their normal pullback.
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