Regular readers and followers of my rants on Babypips know I don’t like price targets for exiting trades. I prefer the trailing stop method. As discussed here. If you haven’t read it, to sum up, the pitfall of target prices (IMO) are mostly psychological. Yes, there’s a mathematical argument for letting profits run. But that…
If you haven’t started thinking about money management in your trading, and instead are assuming ‘your entry system’ will carry you to success then think again. Money management is the cornerstone of trading, without it, your trading results are going to flounder. This article will introduce the ideas of % risk and R-multiples, two concepts…
R multiples are one of the key tools of the successful trader. You’re simply not going to get rich (which I know all aspiring traders want) if you cannot hold out for the big wins. And R multiples are the way we measure the success of those wins. I have an aversion to setting profit…
A legitimate question asked by the newbie is, should you use profit targets or trailing stops when exiting a trade? In this post, I’ll give my unashamedly biased opinion in favour of trailing stops and why that is. I’m no fan of the ‘profit target’ but not without good reason. Let me explain why I…
There are only three directions for market prices to move; up, down or sideways. And because of this, any layperson can from time to time make a correct market call. But to make money consistently you need skills in market timing, handling emotions and money management. Knowing how to position size correctly falls under money…
Ask three different traders what’s the most important thing in trading, and it’s likely you’ll get three different answers. One will say, ‘market timing’. Another, ‘nope it’s trading psychology’. The third, ‘nah, money management. That’s the key’ Actually, they’re all wrong. Each is equally important. Because, like any three-legged stool, take one leg away and…
Short-term trading techniques differ from both day-trading and trend-trading. One of those differences is knowing when to cancel an entry order. I want to discuss this in more depth; it seems academic, but it’s an important point if you want superior trading results. If you read here, or maybe here, you’ll notice my strategy rules…