Letting the trade run

You will learn

  1. Double check the position of your Take Profit and Stop Loss levels
  2. Trust the position of these levels
  3. Let price do its thing until it hits either one of the levels

Why should you learn this ?

  1. 🤑 Your trading results will improve
  2. 😊 You will have confidence in your trades
  3. 🍻 You will be able to relax

If you don't learn this

  1. Doubts
  2. Constantly fearful of price reversing
  3. Believe that every bull-back in the end of the move
  4. Beat yourself up when price resumes its journey to target after the stop loss
  5. Beat yourself up when you didn't move your stop level after being in profit on the trade and the original stop gets hit
  6. Berate yourself after nearly every trade
  7. Unable to win emotionally

Once you learn it

  1. Let your trades run with full confidence that you are following a structured plan that will ultimately make you a more profitable trader
  2. Fully relax during open live trades
  3. Trust you exit plan implicitly
  4. Not be tempted to tinker with your stop loss and take profit levels

Steps

  1. Double check the SL & TP positions
  2. Re-analyse roadblocks
  3. Relax and enjoy the trade

Step 1: You can't rewind the market

Your goal: Double check the accuracy of your stop loss and take profit levels

These are price levels that you will exit your trade at,so it is essential that they are perfectly positioned

What do you need to do ?

  1. Review the TP level:

    • Is it on the correct side of the PCL ? have you taken into account the broker spread ?
    • When longing, the take profit must be < PCL (because if it hits the SL, we're selling out of the trade, so we sell at the bid price, which is exactly where the line is drawn.)
    • Note: In the video, Simon subtracts the spread from the TP in a long trade. I think he's wrong though in this instance.
    • When shorting, the take profit must be > PCL - spread, because we buy out of the trade, which is at the ask price, which is above the line we see on the chart, (reducing your profit)

  2. Review the SL level:

    • Is it in line with your aggressive or cautious attitude to stop loss placement?
    • Is it far enough behind the setup pattern / right shoulder / head, taking into account the broken spread ?
    • When longing, the SL must be < the stop-loss pattern - spread. Suppose the SL is set at $50 and the spread is $1, you'll get stopped out at the price of $51, so you should draw your actual stop-loss at $49, so it'll actually be $50
    • When shorting, the SL must be just > the stop-loss pattern (because the bid price you see at the chart, is the same as what you'll get when you get stopped out).

  3. Ensure that risk to Reward is positive: (better than 1:1)

Step 2: Avoid roadblocks

Your goal: Reassess you roadblock analysis

In the busy period before trade execution it is easy to miss, or incorrectly analyse the presence of roadblocks that may prevent price smoothly to target.

Therefore, you need to double check that your pre-trade roadblock analysis was accurate.

To do this:

  1. Go through the full process detailed in the previous module "roadblocks".
  2. Go to your economic calendar to unsure that there aren't any relevant high impact economic news announcements due in the expected trade open window.

Don't skip this step! It is easy to think that everything is done once you press the button to open the trade, but it isn't!

Following this process will give you full peace of mind that the trade is setup, as well as it is possible to do, and that you will be able to relax thereafter confident that you couldn't do any more.

Step 3: Chillax

Being nervous drains your brain and energy. You've followed the rules. Just relax.

How do you do it?

  1. Stop watching the trade
    • Go do something else.
    • If you can analyse other trades, go ahead, but don't be tempted
  2. It is literally important to have no 2nd guesses; just move on with your life.
  3. If you go back and tinker with the trade, that's even worse; you're cutting into your profit.

Challenges you may face

  1. Doubt of your analysis: Trust yourself. Trust the rules. Trust the system.
  2. Overwhelming need to move you SL: Look at your trade log. Notice how the original SL is best in the long run.
  3. You'll think that every retracement is the end of the move: Don't. Do follow the rules.
  4. You may get too attached to a trade and move your stop further away: Imagine the trade as an employee. You've set them up for success as best you can. Now just let them sink or swim.
  5. Compelled to watch the trade continuously: You've created the trade, according to the rules. Just let it run its course.

How to keep consistent

  1. Add "double check exit levels" and "double check roadblocks" to your checklist.
  2. If you've followed all the rules perfectly, you've made the perfect trade
  3. Put a check-mark in your trade journal

Stages

Beginner

  1. Rarely double checks
  2. Missed checks and miss-analysis
  3. Emotionally attached to trades

Intermediate

  1. Often double checks
  2. corrects errors when identified
  3. Mostly leaves the trade alone and rarely makes adjustments

Advanced

  1. Always double checks the trade
  2. Always Corrects errors
  3. Always emotionally detaches themselves from the trade
  4. Confident that they have done all they can and will ultimately be successful, no matter what this trade does

Review

  1. Check your SL:
    • Matches ATR
    • Includes spread
  2. Check TP:
    • Matches ATR
    • Includes spread
  3. Re-analyse any support and resistance levels
  4. weekly trend lines
  5. Adjust as necessary
  6. In extreme cases, close the trade
  7. Relax, and let the trade run