Watching Dollars Turn To Dust

Nothing riles me up more than watching a winning trade (paper profit) turns into a loss (real loss), once the original stop loss point is hit. Many of my previous trades (especially during my stock trading days) were like this.

Needless to say, I found this pattern extremely distressing.

As traders, we learn from our experience and evolve. In my case, I am now more risk averse.

This is reflected in my trade management style, where I would quickly move my stops to Break Even level (I usually add/substract 1 pip to lock in a few loose change) whenever I get the opportunity to do so.

The recent NZD.JPY trade that I took recently is a good example of my approach to this aspect of trade management.

As you can see, my trade management style is somewhat influenced by my own psychology as well. That's the reason why no two traders trade the same way, because of the way their own unique psychology influence the way they trade.

That is why even though Trader A & Trader B enter the same trade at the same time, how and when they exit their respective trades would be very different from one another.

After all, your trading performance in the long run depends on HOW you exit your trades!

Because our own psychology exerts great influence on how we manage our trades, I personally find trade management to be one of the most difficult trading aspect to master.

And just how do you come to grips with trade management?

By doing lots of backward/forward testings.

Yep, it means lots of screen time!