Some advice to novice traders-Part III

FX:SPX500   S&P 500 Index
501 2 6
Continued from Part II

7- Let the profits run and cut losses short. The latter point was mentioned under bullet 3 by using protective stops. In addition, progressive stops can be quite useful, if placed at strategic levels. A strategic level could be a support, a previous pullback etc. Exits are very important as they decide whether you make money or not. Some traders use pre-determined exit points at some levels like previous peaks, lows or support resistance lines. Some even use exotic Fibonacci levels for that matter. I personally look at strength, meaning how the price behaves at certain pre-determined levels and react accordingly. This prevents early exits and works for me. The drawback is that you may lose some extra pips, if you are wrong.
8-Know your time frame of trading. It makes things much easier and avoids unnecessary stress. You shall stick to a certain time frame, let’s say 15min or 1hr. If you are a scalper, you may even go for 1min or tick charts. Use lower time frames to support your decisions for your entries and exits, but do not solely react upon them. The lower time frames may be telling but they do not necessarily reflect the entire picture.
9- Finally, always follow the trend. Trends are channels which the market price follows. If the market is not trending then it is said to be consolidating. According to studies, most of the time (about 70%) markets consolidate. Even when they consolidate, the prices tend to follow channels, which means price going back and forth within ranges, which are called flags, pennants , triangles etc. It is more difficult to manage your positions during consolidation periods. Always check the trends of larger time frames and watch for smaller timeframe trends within that larger time frame. The most profitable gains occur at those positions.

Regards and good trades
Great tips. Adding to money management: NEVER risk more than 10% of your Total account value on any one trade. This way you would have to have 10 losers in a row to get your account wiped. Do the math, calculate your stop loss level and size of position. If your risking more than 10% do not place the trade. You could even go less than 10% if that is too much risk. Never make a trade unless your WILLING and ABLE to lose that money if your position gets stopped out. Don't ever feel like your missing the boat if you don't make a trade that's beyond your risk tolerance,there will ALWAYS be another opportunity to get into a trade does.
Do you think the SP500 will move up from here? Does it have enough momentum to stay above the 2100 with today's thrust? Or will it pull back to a support (2060, 2040) before trying again to reach new highs? Thanks!
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