- Emphasizes importance of remaining neutral in emotions.
- Suggests different ways for managing risk and maximizing profit, including adjusting stop loss to break even and removing half of the position.
- Highlights significance of risk management in a situation where the trade is already in profit.
Trade update
Last week Monday, we did technical analysis on YM and saw the potential for a long opportunity. The trade so far has worked out, yielding 1,400 points. I want to take the time in this article to explain why it is important to stay neutral in your emotions by remaining in a calm mindset at all times. It can be enticing at times to look at a trade like this and feel euphoria. That is a trap, don’t fall into it. You need to remind yourself of the fact that all that has happened is the analysis you did which you saw a probabilistic edge of one thing happening over another has happened, and that is all.
Different ways forward
There are a few things we can do about the trade’s current position, and they don’t need to be over complicated. We must also remember to stay focused on the fact that we don’t want to try to control the future or hope for a certain outcome.
In this situation, since we are up over 1,000 points, risk management should factor in. That means we can adjust our stop loss to break even, reducing the risk. We could also remove half of the position and leave the remainder to run to the target.
Ultimately, in a situation like this, we can put risk management at a more significant level than probabilities. This is because we are already in profit. When we take a trade, of course, risk management is a vital element, but it should already be defined in our trading plan. In this case, since we are not opening a trade but already in one, we want to focus more on managing risk than thinking in probabilities.
