Trade Management - Moving SL up to Lock in Profits

Here again is an example of moving the SL up past your entry point to lock in profits. If you've been following along you will know that I took half the trade off the table last week and then moved my SL to BE+4pips. This put me into a 'free-trade' position as my position was now risk free.

I have now moved the SL up to lock in further profit on this trade. Why now? Price is currently at a resistance level, if it does not break through then I am sitting just behind a support level. If price does move past current resistance then I would still be wanting to move my SL up to lock in profits, so either way its time to move the SL up in my opinion.

There are many ways to manage a trade and what I have shown is only one. Some people would have left the whole trade on the table and left the SL at original position (or maybe moving to BE) - closing their position when they see a reversal signal at substantial resistance levels. Another method could be to Take Profit (TP) at a number of pips that equals the number of pips that was originally risked, their TP level would have been set and the trade would automatically close at the specified TP. I personally do not like to use set TP levels because it limits the upside potential of a trade. Using a trailing SL like I am does give up some pips in the end but the trade could run into profit far more than I could guess - in a strong trend a trade like I am in could run for weeks!

To sum up trade management - there are many ways to manage a trade once your in. What I am showing is only one. What this method does is allow a trade to run. There is an old trading adage that goes: 'cut your losers and let your winners run'. The idea being that you do not know how far a winner will go and one good winner will make up for and even give profit over multiple small losses.