It’s time to learn 5 Tricks to Letting Your Winning Trades Run.
How often have you heard the old trading adage “cut your losses short and let your profits run”? This is one of those sayings you will hear over and over again in the trading world, and that is because it couldn’t be more true. Although cutting your losses short are extremely important, this article will focus on letting your profits run. I have found, over many years of trading, that it is much more difficult to let winning trades run than it is to cut losses short.
Once you are live in a trade and it is going in your direction, your instincts turn greed and fear into detrimental qualities. Every cell in your body will be afraid of that winner turning around and going against you and you will continue to close trades way too early.
If you can’t let winning trades run, it will be very tough to succeed as a trader. That is why I want to share with you my 5 Tricks to Letting Your Winning Trades Run.
5 Tricks to Letting Your Winning Trades Run: 1. You Must Have a Plan in Place Prior to Your Trade Being Opened
Having a set plan is crucial to your trading in many ways, but especially so with letting your winning trades run. The only way to effectively eliminate your emotions from your trading is to have a plan and trade like a robot. You want your actions to be thoughtless and effortless and to simply follow a set of exact rules, without ever having to let your emotions or judgment cloud your decisions. Simply having a plan in place to keep your emotions out of the picture will drastically increase your chances of being able to let your winning trades run.
5 Tricks to Letting Your Winning Trades Run: 2. Use Two Entries for Every Trade so You Can Let One Run
By opening two positions for each trade you place, you can set multiple take profit targets. This makes it very easy to manage our trades once they are live and stick to our trading plan. You can even go as far as just using a set-it-and-forget-it trading style. This means you can open your two positions, with predetermined stop losses and take profits, and just let your trade play out without having to do anything at all. But even if you don’t do that, having two positions will make it much easier to cash out on one when you hit an initial take profit location, and let the other one run.
5 Tricks to Letting Your Winning Trades Run: 3. Trade in the Direction of the Trend
One of the simplest and most powerful things you can do as a trader is to trade only in the direction of the overall trend. The Forex market has the strongest trends of any market in the world. This tells us that being on the right side of the trend can lead to much larger profits then trying to trade against it. Therefore, we have a much better chance of having big winners when we trade in the same direction as the overall trend.
5 Tricks to Letting Your Winning Trades Run: 4. Use a Trailing Stop Loss for Part of Your Trade
Another great benefit to using multiple entries in every trade we place is that we can trail our stops to ride massive moves. For example, let’s say you open two trades short on EURUSD and your first take profit is hit so you close ½ of your position. The second ½ of your trade can then become a trailing stop to ride the move (and hopefully trend) for a potentially massive winner. This eliminates all your emotions and allows a set plan to play out each time.
5 Tricks to Letting Your Winning Trades Run: 5. Trade a Style and Time Frame That Fits YOU
I left this one for last because I wanted to take a little more time to reiterate its importance. Trading is a very personal profession, and everyone must build their style and plan around their own psychological make-up. You must take time to practice and learn as much as you can about yourself and your psychology. It will be much easier to let profits run when you are trading a style that fits your personality. If you are a very impatient person, you do not want to trade higher time frame swing trades. You will be fighting against your psychological make-up constantly for no reason and letting winning trades run will be close to impossible. You must instead find what style matches your personality and build a trading plan around your strengths and weaknesses. This is one of the most important concepts I drill into my students and a topic I spend a lot of time going over in my course.
Take each of these tips and practice using them in your trading. First and foremost, if you don’t yet have a plan in place you must work on that. Start to test out these tricks and see what you like and what works for you. These have been the 5 best tricks for me to increase the size of my winners and I hope you are able to find success with them as well! Thanks for reading 5 Tricks to Letting Your Winning Trades Run.
If you would like more education and guidance to learn how to do this, I have designed an entire course to teach you how to trade Forex. It will teach you everything you need to learn, from the ground up, while having my personal guidance all along the way. Click here to learn more and take our Full Online Forex Training Course.