When to manually close the trade

5 instances when you should manually close the trade

1. How long to let a trade run.
2. Which trades to close before the weekend
3. When to close your trade before a major news event
4. When you should close the trade at end of the trading day
5. Certain levels of support and resistance

Why should you learn this

1. Clear trade exit rules:
   • build consistency
   • More profitable
   • Predictable results
2. These have been honed to maximise trading results.
3. More relaxed; you know exactly what to do in each situation

If you don't learn it

1. Inconsistent trading results
2. Emotional regret
3. Confusion of what to do
4. Less success

Overview

• Most trades should be left to run to TP or SL
• There are certain situations where we need to intervene

Once you learn this

• You'll be able to relax during a trade; knowing how to react in any circumstance
• You'll be better prepared than 99.9% of retail traders when you enter into a trade..
• You'll achieve your goal of being a consistently profitable trader, because of following the tried, tested, and proven rules

Scenario 1: Going sideways too slowly

1. Count the number of candles from left to right of the head and shoulders (the bodies that the neckline hits) (that number is 'x')
2. To find the left candle: 1. Find the left neckline 2. Draw a horizontal line left 3. Pass the shoulder high/low candle 4. First body you hit, is candle 1
3. To find the right candle: 1. This is the first candle that breaks the neckline after the right shoulder high/low.
4. Count forward from the end of the right shoulder. Once we reach x candles, and it hasn't hit TP nor SL, close the trade

To find the left of the left shoulder. Draw a horizontal line until you hit a candle body from the beginning of the neck line. The right of the right shoulder, is the first candle to close past the neckline.

Scenario 2: Closing a trade before a major economic event

1. Keep a close eye on your economic calendar
2. If a 3 star / red event is imminent and it likely to have a significant influence on your trade, then close the trade before the event happens, regardless fo whether in profit or loss. Don't wait until it starts, or you may get major movement + slippage.

Scenario 3: Spread hour

At 10pm UK time, which is usually 5pm EST, the broker spreads of financial instruments dramatically widen.

• For example, instruments that enjoy a 1, 2, 3 pip spread through the London and New York sessions may have their spread widen to 20, 30, or even 40 pips during the 1st hour of the Asian session (10pm - 11pm OK time).
• After 11pm spreads reduce back to more reasonable levels, although not as low as during the London + New York sessions.
• If left open a trade that is 20 pips away from stop loss may easily be stopped out due to this spread widening.o

If left open, a trade that is 20 pips away from its stop-loss may easily be stopped out due to this spread widening.

Brisbane time zone of spread hour

To plan for this

1. 15-60 minutes before spread hour check for trades that are <50 pips from stop-loss.
2. For these trades, either:
   • Close the trade
   • Temporarily move the stop-loss 50 pips further away; put it back after spreads have settled down

Scenario 4: The weekend

Some instruments will gap up or down on the weekend, and may jump over your stop-loss.

With Oanda, you can use a guaranteed stop loss as long.

If the geopolitical state of the world is exacerbated.

To avoid this

1. Always close any shorter (15m to 1h) time frame, open trades before the market closes on Friday
2. 4 hour and above is ok to leave open.

Scenario 5: Resistance lines

We've identified a level of support or resistance, but decided it's weak enough to trade anyway.

1. Watch the trade more closely than you normally do, because you need to make a judgement call. Set an alarm at a predetermined level.
2. Move your stop loss to break-even and observe what happens in the next 1-3 candles.
   • If there was a strong rejection in the 1st candle, close the trade
   • If price bounces weakly off of that level, keep observing the candles until you get clear direction of where the trade is going to go.
3. Once price closes past the level, put your stop-loss back to normal and go and relax.

Note: The longer price goes sideways at a level, the more likely it is to push through it.

Review

1. Most of the time, you'll let trades run to take-profito
2. Only close the trade manually, while following the rules of one of the above scenarios
3. Don't break these rules!

• You may have fear of loosing profit and want to close early - don't listen to it. Follow the rules
• You may have fear of getting stopped out - don't listen to it. Follow the rules
• You may have impatience due to sideways movement - Just follow the rules

How to build consistency

• We need to journal, what actually happened. What would have happened if made a different decision.
• Write down the reason (the scenario) if you close the trade manually.
• Keep your manual close checklist