How to make better trades

using simple trade management rules

Stock market trading tip for your better trades

Trade management rules can affect results of online stock trading system a lot. But it is not too complicated to improve your trades in any swing trading system.

Therefore it is very important to have defined these rules and during active trading hours work under shield of these rules. You can use these rules for trade management during online stock trading.

You have to have entry, stop and exit points for any trade based on your online stock trading system prepared in advance. It is much easier to prepare good stock setup during analysis made outside of stock trading hours.

And during active trading hours follow only these steps:

1. Entry
   
   Good stock trading software should alert you that stock is near your entry trigger price. You will prepare entry order (to enter long or short trade). And you are now waiting if entry order for this particular stock is executed.
   
   
2. Place stop
   
   Immediately after your entry order is executed, you have to place protective stop loss order based on you stock trading plan.
   
   
   
3. Move stop
   
   As your trade is acting in your favor, you must apply some trailing stop rules. It is good idea to move your stop loss level if your trade is working well. It helps to decrease financial risk and also emotional stress.

   What I can recommend is to move your stop loss level to break even (near your entry point) as soon as your trade reached 50% level of expected profit target.
   
   

4. Take profit
   
   This issue is not as easy as you can think. Trade is open and every P/L profit is virtual till position is totally closed. If your trade was not stopped out by trailing stop then it is very good to have some points where you will take profits.

   It is important to take profit for most of your trade position near your target point. Do not be too greedy and if you will see that price is near your profit target (+/- 0.1 or so) monitor it closely. If you will see that price has problem to go to your profit target , take profit immediately. Do not risk big correction for little more gain.

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