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Step 5: Trade management

In the previous lesson, your pending order has been triggered and turned into an active trade. It is now time to manage your trade until it has completed.

Go to either of the following instructions, depending on whether you are in a buy or a sell position.

  • Managing your buy position
  • Managing your sell position
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Managing a buy position

If you are in a buy position, then you will move your stop loss up to the tip of every new down fractal.

In order to move your stop loss, the fractal must be higher than your current stop loss, otherwise you should ignore the new fractal — you should never move your stop loss down when you are in a buy position.

Remember: Two candles must close after a fractal for it to be valid. Therefore, do not move your stop loss unless a fractal has been confirmed as valid.

The following charts demonstrate moving the stop loss up as new down fractals form. Note that the stop loss is moved to the tip of the fractal.

  1. Initial stop loss

  1. Stop loss has been moved up to new down fractal

Once either your stop loss or your profit target is hit, your trade will be completed and will automatically close. Any potential profit or loss will be shown in your account.

 

Managing a sell position

If you are in a sell position, then you will move your stop loss down to the tip of every new up fractal. Note that the stop loss is moved to the tip of the fractal.

In order to move your stop loss, the fractal must be lower than your current stop loss, otherwise you should ignore the new fractal — you should never move your stop loss up when you are in a sell position.

The following charts demonstrate moving the stop loss down as new up fractals form.

  1. Initial stop loss

  1. Stop loss has been moved down to the new up fractal.

Once either your stop loss or your profit target is hit, your trade will be completed and will automatically close. Any potential profit or loss will be shown in your account.

Remember: The forex market closes on the weekend. Therefore, if your trade is still open on Friday at 18:00 GMT, you should close your trade.

 

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Markets.com

Markets.com
Minimum Deposit$100
Average Spread2,2 pips
RegulationCySEC, FSB
Founded2010

Why

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eToro

eToro
Minimum Deposit$200
Average Spread3 pips
RegulationFCA
Founded2008

Why

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