Optimize Success by Adjusting Trades on the Fly

I always recommend you use a simple stop-loss to manage risk in every trade. I cannot stress it enough – it is easily the difference between success and failure, at least for me.  

Moreover, it is vitally important to determine your stop-loss before you enter a trade. Two reasons:

  1. You are most objective about the trade before you have actually made the trade. Your objectivity tends to disappear after you enter a trade. Your mind tends to block, or rationalize away, negative information that may suggest it’s time to exit the position.

  2. Your risk tolerance should determine whether you place a trade in the first place. When considering a new trade, your expected risk relative to your expected reward must make sense; otherwise move on to a new idea. 

Place that stop and place it first. Don’t rationalize and don’t risk too much to make too little.  

Furthermore, adjust your stop-losses as needed.

Adjusting your stop-loss can be the difference between a little success and a lotta success.

Here’s what I mean:

There come times when you’re in a trade and need to make decisions on the fly. Chart set-ups change, the market mood changes, volatility increases or decreases.

Making adjustments on the fly helps you conserve profits and reduce risk of loss.

Remember: trading is about stacking the odds of success in your favor to help you win over time. This comes with a focus on process, not profits. A stop-loss is perhaps the most important part of the process.
But make no mistake: the stop-loss can be frustrating.

Stop-losses are not perfect, and they can knock you out of a trade that otherwise would have validated your bet and made you money.

But the moment you jettison your stop-loss tactic is the moment you find trouble. It’s a sign your ego is getting in the way of process.
Your ego always remembers missed opportunities, but tends to forget when your stop-loss saved your bacon from a huge loss or blown account.

Black Swan Capital provides stop-losses for subscribers in every trading idea. And it provides stop-loss adjustments to reduce risk or lock in open profit.

We provide the tools to help you succeed.