How Do I Manage My Trades?

4 Common Questions on How to Manage a Forex Trade

1. How often do I check my trade?

2. When do I move the stop loss?

3. How do I set the value of the new stop loss?

4. Is there anything that will signal me to exit the trade early? 

How often do I check my trade?

This will depend on the time period used to enter your trades. Normally, when the 30min timeframe is used, I would recommend checking your trade every 2hrs or so, but my rule of thumb is to give all of my trades at least a few hours to give the pair and market some flexibility. In other words, multiply time frame used to enter trades by four (4) and this will give you an approximation on how often to check your trades. Again, this is a general observation based on how I trade, your trading strategy and risk tolerance will determine how often you should check your trade.

When do I move the stop loss?

I’m not a big fan of moving stops, however, if need to be, wait at least until you are up +40 pips or so. The key to moving stop losses is to maintain a sizeable gap between current rates and your newly adjusted stop loss.

How do I set the value of the new stop loss?

Once you are up at least +40 pips, move your stops to at least break-even point. Be aware of where you are placing your new stop loss, if you place it too close to  the current rate, you may get stopped out prematurely.

Is there anything that will signal me to exit the trade early?

Many factors will help to better track the end of your trades, however, every trader trades the market differently. Greed has a lot to do with this question. When I notice the pair has been sidelining (channeling) for a few hours around the same rate, that’s usually a sign to get out of the trade. If you are a technical trader, then any technical indicator will also help you estimate when to get out of your trades all together. DON’T BE GREEDY! If you see signs telling you to exit the trade, then exit! Take your profits and move on!

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