In the previous lesson, your pending order has been triggered and turned into an active trade. It is now time to manage your trade until it has completed.

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Go to either of the following instructions, depending on whether you are in a buy or a sell position.

Managing a buy position

Remember: Two candles must close after a fractal for it to be valid. Therefore, do not move your stop loss unless a fractal has been confirmed as valid.

If you are in a buy position, then you will move your stop loss up to the tip of every new down fractal.

In order to move your stop loss, the fractal must be higher than your current stop loss, otherwise you should ignore the new fractal — you should never move your stop loss down when you are in a buy position.

The following charts demonstrate moving the stop loss up as new down fractals form. Note that the stop loss is moved to the tip of the fractal.

Managing the trade in a long position

sl1 Initial stop loss

Managing the trade in a long position

sl1 Stop loss has been moved up to new down fractal

How to change the stop loss in MT4 Show instruction

Once either your stop loss or your profit target is hit, your trade will be completed and will automatically close. Any potential profit or loss will be shown in your account.

Remember: The forex market closes on the weekend. Therefore, if your trade is still open on Friday at 18:00 GMT, you should close your trade.

What next?

Trade management is the final step of the beginner strategy. Review what you have learned using our forex beginner strategy cheat sheet:

Lesson
You have completed the Forex beginner strategy lessons. Now find some great ways to improve you knowledge and discover opportunities to apply it in practice.
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Managing a sell position

Remember: Two candles must close after a fractal for it to be valid. Therefore, do not move your stop loss unless a fractal has been confirmed as valid.

If you are in a sell position, then you will move your stop loss down to the tip of every new up fractal. Note that the stop loss is moved to the tip of the fractal.

In order to move your stop loss, the fractal must be lower than your current stop loss, otherwise you should ignore the new fractal — you should never move your stop loss up when you are in a sell position.

The following charts demonstrate moving the stop loss down as new up fractals form.

Managing the trade short position

sl1 Initial stop loss

Managing the trade short position

sl1 Stop loss has been moved down to the new up fractal.

How to change the stop loss in MT4 Show instruction

Once either your stop loss or your profit target is hit, your trade will be completed and will automatically close. Any potential profit or loss will be shown in your account.

Remember: The forex market closes on the weekend. Therefore, if your trade is still open on Friday at 18:00 GMT, you should close your trade.

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  • What do you do if your pending order has been triggered and the market changes direction according to the 30 min chart? Is it just a case of watching your ship sink?
  • w0rm24:
    What do you do if your pending order has been triggered and the market changes direction according to the 30 min chart? Is it just a case of watching your ship sink?

    Hi w0rm24,

    Once your order has been triggered you can move your stop loss closer to your entry point once a new fractal has appeared and has been confirmed.

    Sometimes you will have loosing trades and your stops will be triggered.

    What I recommend is to check back the 30 minute chart every now and then from the 5 minute chart for market direction.
  • How about the case of market changing direction only AFTER you have made an active trade? Do you do anything different at this stage?
  • What do you do during an active Sell Stop trade that was made while the market direction was down and since then, the market direction has switched to up?

    Edit: Actually, is it even possible for the market direction to switch and the trade to stay open? Stop Loss would have hit by then.. Or am I just comfusin[sic] into circles?

    Also, what do you do if during a Sell Stop trade, the price keeps dropping(profit) towards the pivot point, but there is never a new Up fractal? Do you just keep the stop loss the same? The answer is implied as yes, keep it the same. But I have to make sure.

    Thank you guys. Good idea and work. The site's a gem.

    Added Questions:
    What about ever dropping the Take Profit line??
    And what do you do when the Pivot Points move at the turn of the day GMT??

    Thx again, really.
  • Hey guys,

    if market changed direction while you're in the market you will most certainly get stopped out with a small loss.

    To respond to your second question, yes, you only move your stops once a new fractal appears and confirms.

    once on a trade you never move your take profit, you only move your stops.
  • This beginner strategy has had some great, well explained tips for those entering the market.
    Has anyone implemented this specific strategy as code (MQL5 or similar) and run it on real market data? I would love to see the results if someone has. (If not I guess I will write it myself when I get some spare time)
  • Hello, at the end of the strategy, I would like to ask the following question.
    I have read in the PDF tradimo-cheat-sheet the following text i nthe footer of the document :
    "Risk warning: Trading in fi nancial instruments carries a high level of risk to your capital with the possibility of losing more than your initial investment..............."

    If my open position is loosing money, ok but the broker should automatically close it when it reach zero, isn't it? Am I wrong?

    I would like to understand with a detailed example why can I loose more that the initial investiment.

    How does this concept work?
    Could give me a link or tell me where can I go deep in this topic?
    I would like to understand thic concept very very well.
    Thank you again, bye
  • Nice point, maverick.

    To be sure, I'll escalate your question to the team.
  • maverick1984c:
    Hello, at the end of the strategy, I would like to ask the following question.
    I have read in the PDF tradimo-cheat-sheet the following text i nthe footer of the document :
    "Risk warning: Trading in fi nancial instruments carries a high level of risk to your capital with the possibility of losing more than your initial investment..............."

    If my open position is loosing money, ok but the broker should automatically close it when it reach zero, isn't it? Am I wrong?

    I would like to understand with a detailed example why can I loose more that the initial investiment.

    How does this concept work?
    Could give me a link or tell me where can I go deep in this topic?
    I would like to understand thic concept very very well.
    Thank you again, bye
    Hi maverick,

    First of all, just in case you are trading with the free 100 from Varengold bank: At Varengold, you cannot lose more money than you have on your account.

    In general and with other brokers, when trading with leverage, you can lose more than your initial deposit. You are perfectly right in saying that normally the broker will close the position already before you reach 0 on your account. All of the brokers advertising at tradimo do this, but there are also brokers out there that do not provide this service.

    There is an exception, however, namely a so-called market gap. When such occurs, the broker cannot protect you from a larger loss than you might have intended and in some rare cases this can exceed your deposit.
    I will give you an example: Let's say you open 1 short trade at the price of 100 and put your stop loss at 110 which is 1% of your account. So your account in this example is 1000. Now let's say over the weekend, when the markets are closed, the price suddenly goes from 100 to 10,000. In this example you would now have to pay the broker 9,900-1000 (your account balance), so the broker would send you a bill asking for 8,900.
    Now this was of course a drastic example and in forex this is very unlikely to happen, but when you are trading stocks this can happen from time to time when companies release big news over night.
    A guaranteed stop which is offered by IG and CapitalCFDs can help you in such a case. Also, FxPro guarantees to never let your account run below 0.

    I hope this helps you, if any questions are open, just ask here please.

    Greetings,
    Sebastian
  • in Managing a buy position theres:

    "the fractal must be higher than your current stop loss, otherwise you should ignore the new fractal — you should never move your stop loss down when you are in a buy position."

    How could such a fractal form without triggerring the stoploss in the first place? The same applies to sell positions and there are 2 questions about this in the quizz. Is such situation even possible?
  • Hi Sebastian Kuhnert, thank you very much for your explanation it is very clear.
    I suspected the answer of my question was "because of the market gap" but I wanted to be sure smile
    ok so, let's say theoretically this can happen of course even if highly improbable.
    In which way some brokers can avoid me to loose more than I have in my account if such a gap happens?
    Will they loose money for me in this scenario? I don't think so, so please explain smile
    Thank you very much, and thank you again ,you and your team are the numebr one !!
  • Glad my answer has helped you. Put simply, if a gap occurs, the brokers that give this guarantee lose money. However, when you use a guaranteed stop, they usually charge a small amount for this service and so it works like an insurance before a risky trade.
    If the broker simply guaranteed that you will never lose money even though they don't offer guaranteed stops, they have probably calculated that they will make more money from the additional customers that they will be able to get through this marketing initiative than the amount of money it costs them when people lose money. Often they also provide you with less leverage than other brokers to reduce the risk for themselves.

    Does this answer your question or can I still help you further?
  • yegon:
    in Managing a buy position theres:

    "the fractal must be higher than your current stop loss, otherwise you should ignore the new fractal — you should never move your stop loss down when you are in a buy position."

    How could such a fractal form without triggerring the stoploss in the first place? The same applies to sell positions and there are 2 questions about this in the quizz. Is such situation even possible?
    Yes, this can happen, for example when a previous fractal had not been confirmed yet and gets replaced with a new one.
  • weepingAngel:
    This beginner strategy has had some great, well explained tips for those entering the market.
    Has anyone implemented this specific strategy as code (MQL5 or similar) and run it on real market data? I would love to see the results if someone has. (If not I guess I will write it myself when I get some spare time)
    Sorry for the late reply to this: Yes, this has been implemented as code and tested for the last ten years even. You can see this in our backtest.
  • Sebastian Kuhnert:
    yegon:
    in Managing a buy position theres:

    "the fractal must be higher than your current stop loss, otherwise you should ignore the new fractal — you should never move your stop loss down when you are in a buy position."

    How could such a fractal form without triggerring the stoploss in the first place? The same applies to sell positions and there are 2 questions about this in the quizz. Is such situation even possible?
    Yes, this can happen, for example when a previous fractal had not been confirmed yet and gets replaced with a new one.

    still dont get it, we are supposed to only use confirmed fractals. Once the fractal is confirmed we move the stoploss up to the new fractal and once the stoploss is set how can a lower fractal form without it triggerring the modified stoploss?
  • Hi Sebastian, yes your explanation has been very clear , thank you.
    Best Regards
  • I'm completely new to the world of trading so this may be a silly question. Why is such a strategy even being taught, it seems pretty formulaic and straightforward, can a computer program not implement it?
  • What can I do if the market direction changes (in the 30 minutes chart) when I already have an active trade?
  • I am a bit confused. I finally got a pending stop sell order to trigger but when I went to modify it to change the stop loss I have found it is no longer in the trade window but in the account history window. The price has neither reached my stop loss nor the take profit so shouldn't I still be able to amend it? It looks like I have lost €0.54 according to the account history but it should still be active and amendable I thought.

    Have I done something wrong? The only thing I can think was that during the manage pending order stage I moved the adjusted the stop loss by dragging the line instead of typing it in once, but the values were still correct.

    I have a screenshot if you need it.
  • ok sir, i know my question is a little bit repetitive to those asked above, but i have some new points to add. say the market trend is up and now i entered a buy order and the order is transacted; and now the market trend is down. i know at the time i should observe the 5-min chart to adjust my stop loss level and close the order if it is hit.

    however, given the market trend is now Down, does this mean that there is a greater chance of seeing more down fractals than the up ones? which means, i may continuously adjust my stop loss level downwards, and in a extreme scenario, does this mean that, my stop loss level can never be hit? in the sense that, the market is continuously going down, and i see more and more down fractals, and adjust downwards whenever i see that.

    many thanks.

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