Good Day All, Are ya all liking the long call trade? Have you been following it? This week we are looking at Step 6 of our 7 Steps to successful trading and investing.  If you haven’t checked this out yet on the Tackle Trading website you need to do so this is an absolute must for rookie traders. Step 6 is managing the trade. In this case, our analysis was solid and our pick has been good thus far and is moving in the direction that we expected it to go. This does not always happen and that is why we use good stop loss and position sizing techniques or another way to say this is risk management techniques. Does our risk management end after we place the trade? It does not, we need to manage our trade to extract the most profit from it and that is what we are doing this week.  Before putting on this trade we used the S.E.T method to determine what our trade would look like in an ideal scenario, we had an entry price, a stop loss, and a target.  We had an entry price of $127.10 and we chose a stop loss of 30% of the long calls value to get out should there be an issue.  We also targetted the $140 price zone as an area that we thought might bear fruit for us.  However, if you look at the chart of GRUB you can see that it moved up nicely but it is very close to a possible source of resistance that is before our initial target so we need to review our position to see if an adjustment is warranted. One additional note, it is also setting up in a pattern that could work very well in our favor so what are we to do? Well, our goal is to let our winners run but we also don’t want to let a profit trade turn into an expense trade. There are several techniques for maximizing profits and we will discuss two of them in this week’s blog.
First up would be taking off a portion of the position at a profit so as to reduce the overall risk in the trade. This only works well if you have multiple positions on. We would want to move our stop loss on part of the position up to the desired amount and leave the other part of the stop loss outside of the ATR range so as to not get knocked out of the position prematurely. You could close a portion immediately but that would be going against the letting the winners run philosophy. Using a trailing stop on part of the position, in this case, could also work.
The second choice would be to just move our stop loss up to outside the ATR range and let the market work. This technique would put you in a profit position depending on how far the equity has moved since putting on the trade.
Check out this week’s video to see me go through the process of moving the stops.

Happy Trading!