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The three actions you can take to ride your profits and cut your losses

by , 23 January 2014

"Timon, I keep closing trades before I should, how can I stop this from happening next time?"- E.

Anyone who tells you they've never cut a trade too early for a quick profit are either lying to you or they've been trading for a very short time.

After all You can never go broke taking a profit, or can you?

If you take too many small profits then the market will eventually eat up your entire portfolio

Remember we’re dealing with markets where millions of rands are traded every day.

So, all of the information that you see is based on historical data.

The markets are impossible to predict with accuracy which means, you won’t keep on banking these small profits!

Eventually, you’ll hit a big loss that will wipe out all of your small gains.

So, the trick is to ride your winners up and cut your losers sooner - But how?

Here are three actions you can take to ride your profits and cut your losers!

There are three important steps that you should always implement when you trade. These will make sure you ride your profits longer than your losses.

Action #1: Write down your levels and follow them

The only time you should be creative with trading is when you create your winning strategy or when you do your trade analysis on the weekends.

Only this time you’ll write your TPOA (Trading Plan of Action) for the week.

You’ll have your trading levels such as, your entry, exits and risk levels right in front of you.

When the trading day comes, you’ll have the reasons to get into your trade without any questions.

This will stop you from making any emotional trading decisions, which does not fit with your trading strategy,

Action #2: Set automatic levels and leave your winning strategy to do its thing!

You spent the weekend doing analysis and writing down your reasons and levels and now you’ll need to execute your trade!

So, as soon as a trade lines up, then get into it and put in your automatic levels (your risk and take profit level).

By having these automatic levels in, you’ll let the computer watch your trade and if any of the levels hit, it’ll get you out!

This will stop you from interfering with your winning trading game-plan. So you won’t have to worry about banking too soon or riding your
losses for too long again.  

Action #3: I’ll make sure you ride your profits higher than your losers.

I spend every day looking for high probability trades for like-minded traders.

I do all of the necessary calculations to find the perfect entry and exit levels so that you never cut your profits too early and you’ll definitely not ride your losses too long.

So join me today and let’s grow our wealth together by simply clicking here!

Always keep in mind “Wisdom Yields Wealth”.

P.S Any questions? Join our community of investors and traders just like you. Simply go to www.investorsclub.co.za and register. It's free to all Trading Tips readers. You can ask any questions you have about trading right here and either myself or the community will be sure to answer your question!

Editors Note: If you'd like to boost your trading performance, success and learn more top insider tips and tricks Timon has learnt over the last decade then follow him on Twitter @timonr. 

The three actions you can take to ride your profits and cut your losses
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