“Having a beautiful idea does not get you very far if you don’t do it the right way” – Colm O’Shea
It’s not about being right, it’s about how much you make when you are right.
Have you ever picked a trade perfectly, and then either not done anything about it, or taken only a small positon, and watched it do exactly what you thought it would?
Your problem was implementation.
Many of the Market Wizards talk about how implementation of the trade idea they have developed is more important than the trade itself. If you have a good idea but fail to capitialize on it, or to manage the risk effectively, then the idea itself is pretty worthless.
When you enter into a position, plan ahead on how you are going to generate the most profit you can from it:
- What is the current market type, and how can you best build a position in this market type?
- Do you need to scale into the position quickly as you expect it to get away from you? Or can you take your time to build the position?
- Are there any points along the way to your profit objective that you want to take profit and then re-enter?
- Where are the likely opportunities to trade against, or hedge your core positon?
- Is there a way to build a risk free position if the price chops around near the entry for a while?
- How will you manage risk to both your starting capital, and profits gained during the trade?
How else can you implement the trade to profit from your idea while managing risk?
Learn more about this concept in lesson 13 of the Advanced Forex Trading Course for Smart Traders: Advanced trade management techniques.
About the Author
Sam Eder is a currency trader and author of the Definitive Guide to Developing a Winning Forex Trading System and the Advanced Forex Course for Smart Traders (https://fxrenew.com/forex-course/). He is a part owner of Forex Signal Provider www.fxrenew.com (You can get a free trial). If you like Sam’s writing you can subscribe to his newsletter for free (https://fxrenew.com/newsletter-sign-up).