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Managing the Trade

Once a candle touches your pending order, the pending order will automatically enter you into a trade.

Managing a long trade

You will now have to manage your trade by adjusting your stop loss up in the direction of your trade.

If you are in a long trade, this means that as the price moves up in your favour, you will adjust your stop loss up to every new low that occurs within the last ten candles.

The image below shows a long trade that has been executed once the pending buy stop order has been triggered, shown at 1. The stop loss is at the lowest point within the last ten candles, shown at 2.

Move the stop loss up as the price goes higher

You can see in the next image that after some time, the trade progressed up and a new low appeared within the last ten candles. The stop loss was moved up accordingly, shown at 1.



You continue to move your stop loss to any new low as the trade progresses. Eventually, the price will return and hit your stop loss and you will exit the trade, hopefully at a profit. At this point you can then go back and determine the market direction and wait for a new trade to set up.

Managing a short trade

If you are in a short trade, this means that as the trade moves in your favour, you manage your trade by adjusting your stop loss down to every new high within the last ten candles.

The image below shows a short trade that has been executed once the pending sell stop order has been triggered, shown at 1. The stop loss is at the highest point within the last ten candles, shown at 2.

Move the stop loss down as the price goes lower

As the trade progresses down in your favour, new highs will appear as new candles form and so you will have to move your stop loss down as they do.

You can see in the next image that a new high has appeared within the last ten candles and the stop loss was moved down accordingly, shown at 1.



You will continue to move your stop loss down to any new highs that appear as the trade progresses. Eventually, the price will return and hit your stop loss and you will exit the trade, hopefully at a profit. At this point you can go back and determine the market direction and wait for a new trade to set up.

What next?

Now that you have completed the ten bar breakout strategy, you can go to the next lesson where you can learn the variations of this strategy.