In the previous post I showed a video where I show you how to scale out of the trade using Metatrader4. (If you don’t know how to scale out of the trade, watch this video: Scaling Out Of The Trade). If you are going to trade Strignano’s Forex Signals, this is a trading technique you want to master.
Here is a trade I took this morning using Strignano’s Forex Signals. It is the perfect example of how to scale out of the trade. Take a look…
Trade Details:
- The signals got me into the trade going short at the dotted blue line.
- The thin orange lines are the trading targets Tom provides when the signal comes out.
- As the price broke through these important price levels, I simultaneously moved my stop loss up and scaled out of the trade for 26, 64 and 86 pips of profit.
For most of the trade I was at NO risk and had already secured profit. Do you understand how stress free it is to manage a trade when you have no risk and have ALREADY banked some profit? I love it!
***Sidebar***
You might be wondering what the blue circle with arrow is on the chart. I had an Expert Advisor created to help me scale out of the trade and move the stop loss up on autopilot. Once I place the trade and set my stop loss according to Strignano’s Forex Signals, I set up the EA to manage the trade. I draw my price targets and use other important levels Tom provides to determine my exit strategy (when to move my stop loss and take profit). Once I set up the EA, I’m free to look for more trading opportunities. And if I determine I need to make some changes as a result of price action, I just change the settings.
***End***
No matter how you cut it, scaling out of the trade should be included in your trading strategy. It is not only another tool to limit and eliminate risk… but it can be a very profitable way to trade (as you can see above). I wouldn’t trade Strignano’s Forex Signals, or any other trading system, without knowing how to scale out and at what levels.
Any questions? Leave a comment below…
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[...] Scaling Out Of The GBPJPY Trade For 26 Pips, 64 Pips And 86 Pips Of Profit! [...]
Hi Edward: Can you please share your EA. If you would like to do this then please send it to my email address. Thanks!
I’m still testing it and making adjustments. I haven’t decided what I’m going to do with it yet. Of course, I’ve spent time and money on it, so I don’t think I will be giving it away for free. But, who knows?
Thanks for visiting, and come back soon.
Edward
Ed, I bought Forex Confidante and Tom talks about scaling up when you’re winning and scaling down when losing. I understand that. He also talks about adding to winning positions. Could you explain that please.
Regards
Henry
Hey Henry,
Remember, I am not Tom Strignano, but I’ll tell you what my interpretation of this is. Since being in Strignano’s Forex Signals, I have picked things up from the webinars and contact I’ve had with Tom.
As you said, inside Forex Confidant tom talks about scaling up when winning and scaling down when losing. Keep in mind, proper money management rules still apply. But look at it this way… if you make a couple of winning trades you could scale up future positions because you would be putting some of your winnings at risk, not your initial investment. So, basically you can use some of the winnings to go for bigger gains. On the other hand, when you are losing you need to protect your capital… so you should scale down. This keeps you from falling into the trap of trying to “make up” your losses by putting on bigger positions. This is a fast way to turn a bad day into a REALLY bad day.
The same thing happens when he talks about adding to winning positions. Let’s say you place a trade and are up 30 pips. Well, you could ADD to your position (basically only putting the 30 pips winnings at risk), without risking any of your initial investment. That way you can use your winnings so far to go for bigger winnings over all. Of course, you have to be willing to put those initial winnings at risk. Hope that makes sense.
These are aggressive tactics of a pro trader. Protect capital first. But when things are going your way, use some of your winnings (not initial capital) to go for even bigger gains.
Here is something very similar to adding to a winning position, which is scaling into the trade. I’ll use an example of a Strignano’s Forex Signal trade.
You see, inside Forex Confidant, Tom teaches you when to enter the trade and calculate profit targets. These are very similar to the signals you get with 6 different profit targets. But inside Strignano’s Forex Signals you also get other levels calculated by Tom’s proprietary equations, such as pivot points, Daily Range and Trend Reactionary Numbers. These are very important decision making levels.
So, let’s say you get a signal to go short right above a Trend Reactionary Number. It could break through this level, or it could bounce off. So, you could enter the short with a smaller lot size. (For example, if you normally enter with 3 mini lots, enter with only 1 mini lot). Then, if it breaks the TRN, you could add to the position with 1 or 2 mini lots to go for the full profit potential.
I know you don’t get these levels from Forex Confidant. You get entry point and profit target calculations, but not these other important levels where you could make this decision to scale into the trade by adding to your position when price breaks important levels.
Hope this helps.
Let me know if you have any other questions.