When/How to move SL to BE and to profit in a running trade ?

Hello everyone:

Today I want to discuss a topic in Risk Management, specifically on when and how to move your STOP LOSS to BREAKEVEN or in PROFIT when you have a running profit trade/position.

In an impulsive phase of the market, we want to make sure to protect our entry as well as secure profits.

In this example of EURUSD, I managed to get 2 entries in, and manage it to my best ability and secure profits

Trade close down for +7.9% profit

Original Trade Forecast and Analysis:

This is a topic that will have various answers across traders, as this is certainly up to each individual trader’s strategy, style, and management approach.
So understand there is no right or wrong, “holy grail” kind of decision.
It's up to you individually as a trader. I will share my management, and why I choose to go with these types of approaches, and you can certainly use them to your advantage to tweak/modify them to fit your strategy.

Few things to keep in minds are:

1. Moving the SL to BE or/and in profit is a way to protect your entry, as well as secure profit.

2. Sometimes moving the SL too early may “choke” the price, and you can get stopped out for BE or small profit. Then watch the price take off in your desired direction, which can create negative emotion.

3. Whereas sometimes if you don't move SL to BE or in profit, you can watch a trade that hits 3:1 RR or more, end up reversing down, passing your entry point and to your actual SL of -1%, which can also create negative emotion.

4. No perfect scenario or management when it comes to the aspect of trading, as every trade is unique, and different outcomes may happen, since the market itself is not perfect, and can do whatever it wants to do.

Now, I will explain my own management when it comes to moving SL to BE or/and in profit.
Certainly this is NOT the only way, nor it will be the best way, but over the years of backtesting & chartwork have given me reassurance on these types of management ways.

I will then show some real live examples on the trades that I closed down, and how I manage them as well.

CADJPY - Original Trade Forecast and Analysis:

GBPJPY - Original Trade Forecast and Analysis:

CHFJPY - Original Trade Forecast and Analysis:

NASDAQ -
AUDNZD - Original Trade Forecast and Analysis:

First, a general rule of thumb for me. IF the price has hit about 1:1 RR or so, and has broken past the previous recent lows,
I will move my SL to BE. There is no exception in this rule.
Again, I explained earlier that sometimes this will help you to protect your entry when price reverses, and sometimes it will choke the price.
In this case, I would rather take a BE first, and re-look for entry again in the same position, as long as the bias and the price action is still valid on both the higher time frame and lower time frame.

Second, once the entry is in some profit, say 2:1 or higher, I generally will move the SL up to about +0.5% profit or so.
Just want to secure a little profit while not choking the price entirely.

Third, once the entry is in 3:1 profit, then I will move my SL to +1% profit.
This is where I generally will decide whether I should take full profit here, or hold the trade for a mid-long term if the higher time frame has given me the bias.

Fourth, since the trade has already been in 3:1 profit or higher, generally we can expect a continuation correction to form now after the impulse phase.
If it's a smaller correction and price isn't reversing up sharply right away, I will move my SL to about +1.5% profit, set my alert above the continuation correction and observe the development of the correction.
This is generally a point where I can decide to hold the trade longer, or if it reverses up from the continuation correction, then exit the trade for profit.

Fifth, if we start to see a possible reversal development, then I will move down my SL to the recent swing highs/lows,
or just above the reversal correctional structure, and will let the trade tag me out for profit if it reverses.


Any questions, comments or feedback welcome to let me know :)

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Jojo