Not to leave a winning operation becomes loser

Not to leave a winning operation becomes loser

In the market we must always protect our revenues. Point. There is nothing worse than be observing a position that was earning 30 points in a minute, just to see how it reverses and in a short time he is losing 40 points or more and activates our stop-loss. If one has not undergone this experience, you can be considered lucky, since it is a situation faced by most of the operators more often of what you can imagine and is an example of a poor monetary management. The Forex market can move fast, what can become a winning operation loser in a matter of minutes, so it is critical to proper management of capital.

One of the primary rules in trading is to protect profits, even if it means winning only 10-15 pips in an operation. For some, 15 pips it may seem like a pittance, but if we make 10 operations that earn 15 pips on average, this means a total gain of 150 pips which is not negligible. 



Of course, this approach may seem that we are operating as speculators fear fearful to take the risk, but trading the most important thing is to minimize losses and along with that, make money as often as possible. We have to think that it is our money. Even if it is money that we can lose, commonly known as venture capital, we must always bear in mind that we are against the market. Like a soldier on the battlefield, first of all, it is necessary to protect themselves.

There are two ways to avoid that an operation passes winner or loser. The first method is to go with the market (the trailing stops) stop moving. The second is a derivative of the first, and basically operate with more than one lot. The trailing stops require more work, but it is one of the best ways to ensure the cattle pips. The key to the use of the trailing stops is setting a target of profit taking in the short term.

For example, if our short-term objective is 15 pips, this means that once the market moved on our behalf about 15 pips, we proceed to move stop loss to breakeven (the price at which position does not produce profits or losses). If at the end the price moves against and activates the stop, this doesn't matter since even though profits were not obtained, there were no losses. Conversely, if the operation is developing positively, we can go moving stop loss along with the market in increments of 5 pips, allowing you to go little by little protecting retained earnings. This we can compare it with a game of Black Jack, in which retired $25 as part of our untouchable profits whenever we won $100.

The following method as mentioned involves operate with more than one lot. For example, if we operate with two lots, we can establish two goals of earnings. The first can be placed on a more conservative level which is close to the price of entry, about 15 or 20 pips, while for the second batch can be used a much more remote goal with which we seek to make a more considerable profit, thereby increasing the profit/risk ratio. Once the first target is reached, move stop loss to breakeven, which in essence complies with rule not to allow that a winning operation becomes the loser.

With respect to the trailing stops, 15 pips use does not constitute a law written on stone. Everything really depends on the style of trading and the framework of time spent by the operator to operate. For example, traders who like to operate in the long term can be one first much greater than about 50 or 100 pips target, while short-term traders may prefer one objective of 10-20 pips.

Manage home individual operation is always more art than science. However, trading in general requires that we put our money at risk, so it is always advisable to think in terms of first protect our revenues to then try to increase them if possible. The successful operation in the market is simply the art of accumulating more gains than losses.