The best trade management advice I ever received:
"Give your trade some room to breathe."
Sounds simple, but it contains some key lessons:
Don't use stops that are unnecessarily tight. Unless your entry is godly or the setup justifies it, give yourself a bit of space to be wrong. Especially if you're trading altcoins with leverage - you should expect wicks through even the 'best' levels. That shouldn't invalidate your entire idea.
Don't rush to manage the trade immediately. If there are at least a few % until your target/invalidation, don't worry about small moves in between. The initial reaction may be important, but even on intraday time frames it's common for the market to range, retest your entry etc. before playing out. This is especially true if you're trading high time frame levels and targeting high time frame moves - give the market some time and give yourself a chance to be right.
Overmanaging is a symptom of oversizing. If you find yourself glued to your PnL and the 1 minute chart - accompanied by feelings of anxiety and regret - you've either opened your archived WhatsApp messages in front of your girlfriend, or you've risked too much on something mediocre. The looming threat of an outsized loss will make you paranoid and jumpy, leading to poor trade management decisions. To use a practical example, I've seen traders go from unprofitable to profitable just by switching from perps to spot (even though the latter is more expensive to execute). Trade the chart, not the potential PnL.
Be wary of break even. Moving to break even does not make the trade "risk-free". The risk is that you get stopped out on a perfectly valid setup that should've made you money if you were more patient. That risk is compounded if suddenly your best setups turn into break evens and you have the same number of losers - that's how you erode an account. Save the break evens for specific circumstances (if any) - extraordinary entries that shouldn't be retested if your idea is correct. Otherwise, avoid their allure. In basic TA terms, a break even stop on a long at support = order to sell support. A break even stop on a short at resistance = order to buy resistance. Forget your own position for a moment: would you take your stop order as a separate trade? If not, reconsider. You're not that important, the market doesn't care about your specific position.
Or you know, play it by ear, like I do
Posted Using InLeo Alpha
Its all greek to me.