Many people trade in this industry and they make a good profit. It is not only you who are making a consistent profit but you will find there are thousands of people who are doing well in their career. It may happen to you when you find that your trade is doing well and the trend is running in your favor. You may also think that you need to let your profit runs but do now know if you should set a new stop-loss in trades. You may also think of setting a new target in this trades. This article will tell you and give you helpful ideas to know when the right time is you can set a new profit goal and also a new stop-loss in your trades.
Unless you set realistic expectations from the market, you are never going to become a profitable trader. Most retail traders fail since they don’t have any knowledge about the investment industry. They are always taking a huge risk and losing a significant portion of their investment. But if you look at the expert traders, you will find a completely different scenario. The new retail traders are always taking the managed risk even though they have enough capital to trade the market.
So how do set realistic expectations? To be honest there is no exact answer to this question. However, 2-3% monthly gain is considered as a class return on the Forex market. As a professional trader, you have to consider the risk factors of the market. Never trade with a tight stop loss as it will increase the chance of losing more money. Make sure you have an online trading account with a reputed broker like Saxo so that you can do the perfect market analysis. Consider this profession as your business and you will see a dramatic improvement in your career.
When your initial target has been achieved
You can only set a new stop-loss when your initial target profit has been achieved in your trades. If we give you an example, it will be easier for you to understand. Let’s say you placed a trade where you intended to make a 10-dollar profit. The trend was good and it was going in your favor and when you have made your 10 dollars of profit, the trend is still ongoing. You can then set a new stop-loss because you have achieved your profit. You can also set a new profit goal because your profit has been achieved and now you want to make more money. You can do all these because you have made your initial target and now you want to let in a run for more money. People try to make a profit and keep their trades open but they do not set a new stop-loss. This is where they lost money as the trend changes and it keeps going down, they lost money. If they had set a new stop-loss, they can save their money. A new stop-loss also helps you to set a new profit goal. You can now go for the 16 dollars of profit in your trades that you had initially set for 10 dollars. You need to set a new stop-loss is because if you do not set it, you can lose your money at the initial stop-loss. If you have a new stop-0loss, it will only close the trade when it goes down but it will not make your profit small.
Why not when the trend is going well?
The trends are volatile and they are changing every time. If you try to hurry and set a new stop-loss and also change your target when you have not achieved your target, it will not help you to save the money. The trends can change and it will close your trades as you have changed the stop-loss.