Learning Trade Management

Hey!

I think you should stick to your plan. When you enter a trade and you have already solved the trade equation with the variables, you should follow it. One of the biggest problems is that often when entering a swing trade you end up managing like a scalp and also when you are on a scalp you end up managing like a swing. If I remember correctly Al gives examples of this in book 2.

I will just explain the example of a trade that would be to manage as a swing but ends up managing as a scalp, because as you said yourself you are a beginner, and beginners should avoid scalps.

Al's example for swing trading goes something like this: when entering a swing trade, many traders end up making it too early because they lost in the last trades and are satisfied with making a small profit, but when exiting early (let's assume in a target 1x1) he is solving the trader's equation with other variables, and these variables would make the trader's equation negative. They lie to themselves, but swing traders need these big profits to make up for their losses.

To solve this problem Al suggests going into a trade and then going to Walmart - in the sense of getting out and back in a couple of hours.

With every tick the odds change and of course there will be occasions where even in a swing trade you can exit early your trade, but you cannot lie to yourself and always exit before.

Scheduling trades at the end of the day is great for studying, but remember that doing this during the trading session is much more difficult so don't get upset.

Another suggestion: Keep watching the course videos constantly. There's so much more I can take in and seeing them just once isn't enough (at least for me).

Att,

Hi,

Since learning trade management feels so open-ended

This is exactly how I feel as well. While the individual concepts in the course are well-organized. Trade management is bit and pieces here and there. We gotta look for them in webinars video as well.

@ludopuig had some really excellent answers regarding this topic in this forum. That has helped me a lot so I'm really thankful for that!

This is one such thread: https://www.brookstradingcourse.com/support-forum/general-trading-discussion/reading-chart-markups/

Here https://www.youtube.com/watch?v=xE-N-rBtZoA&t=93s

If buying bar 3 close with stop loss bellow 2, Mr. Brooks said to get out either bellow 4 low (bear bar closing on its low at the top of a bear channel) or on 6 close (3 consecutive bear bars with 2 closing on its low)

If buying 14 close, should get out bellow 16 or 18 close or 1 tick bellow 18.

However, consecutive bars isn't always a good reason to exit: https://www.youtube.com/watch?v=QVh4XZ5OypA

Here, if sold 50 close with stop loss above 48, should we exit at 56 bull bar closing near its high?

No, Mr. Brooks said in the video that it's a sell zone. It's the middle of the breakout 48-50.

Either that we should exit above 52 or hold to rely on the stop above 45. Exiting in the middle would only lead to disaster. It's a skunk exit point.