Trade Management
Tying it all together with simulation and replay trading
Exiting the position when the conditions no longer support your setup is key to the preservation of capital. This step will focus on defining key looks that will force you to take an exit and wait for the next setup.
The trick to not having to manage a trade is to only take setups that are so strong, there is little to no chance you will ever have to manage out of the trade. Only when doing medium probability trade will you need tighter management. Let's look at the basics.
STOPS FOR FUTURES TRADING= 10-14 tick max (almost every trade on the 5-1 chart will only have 10-12 tick risk. Sometimes the high-volume area entries use 12 to max 14 if needed to be “beyond” the areas the market should not go. Risks are reduced after pivots or signals.
PROFIT TARGETS- $100, $200 – unless runner left on due to triple trigger strong outside- lock in $200 a runner exit usually ends with divergence or 2nd Fibonacci areas when triggers weaken. Some traders may opt for 10 and 20 ticks profit when starting out. You will quickly learn when you take more or less money dynamically by reading your indicators and trading the expected outcome as discussed in the example trading plan provided to you in the educational material.
AFTER $200 PROFIT is achieved, If any trigger line is weak (small trigger inside the large trigger) then exit the trend trade after a divergence on the 5-1 chart becomes true or exit AT the Fibonacci level with a limit order just below it. below is an example.
click to enlarge - Nexgen Software Services Rules for Taking Profit with Trend Trades
WHEN TO HOLD FOR LARGER MOVE: When all charts have small triggers (outside), the large triggers in trend direction, move stops to a no loss and then exit with preset targets or Fibonacci areas.
WHEN PRICE REACHES one-to-one (1:1's) on 5-1 chart, move the stop to break even. It is ok to exit 1st profit at the one to ones if close to $200 profit per contract or better. The following example shows the first exit at 1:1's and holding for more due to very strong triggers.
click to enlarge - Nexgen Software Services Rules for Taking Profit with Trend Trades
If you have a pivot stop out of prior divergence low, exit some or all of the trade at the prior low or move your stop tight on the position. If the market reverses from a pivot stop out of a divergence low, the trend may end if your triggers agree. The location of the small triggers above the large triggers tells you that the trend is finished and you probably will not get any more easy trend trades.
click to click to enlarge - Nexgen Software Services Rules for exitingTrend Trades
It is generally a good idea to exit if there is a 2nd divergence that is a lower low or higher high than the prior pivot.
2nd divergence may cause exits
Conversely, you must IGNORE DIVERGENCE on charts if the triggers are in the strongest configuration and making consecutive lower lows. Hold for more profit with this configuration.
click to click to enlarge - Nexgen Software Services Rules for exitingTrend Trades
Please watch the following video to enhance your understanding of trade management and chart reading.
It has been proven prudent to master your understanding of the rules in your plan by making simulated trades that are highly profitable and very consistent. Only after you are completely comfortable taking the correct trades and fine-tuning your own version of Nexgen's trading plan will you make real money trades. DO NOT TRADE LIVE MONEY UNTIL YOU HAVE A WRITTEN PLAN AND CAN FOLLOW THAT PLAN CONSISTENTLY AND CONFIDENTLY EVERY DAY!
Last modified 1mo ago
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