#213: Splitting your trade positions

Podcast: Splitting your trade positionsweekly video In this weekly video: 00:34 – Most people enter at the market 01:00 - Trading the longer time frame charts – look to split your entry orders 02.33 – The keys to trading 03:13 – Taking a part of your position at the market and part at a retracement 04:30 – Entering on a retracement 05:20 – Use these lessons to help your trading In today's video and podcast. I'm going to explain why I like to split my orders into two or more parts. Let's talk about that right now. Hi Forex traders, Andrew Mitchem here, the owner of the Forex Trading Coach. This is video and podcast number 213. I'm going to be telling you and explaining. Why I prefer to split my positions up into two or more parts. Most people enter at the market You see, so many people tend to just see a trade, enter at the market, take the trade and that's it. For me, it's like well, that's okay but there's a better way of doing that. If it's a shorter timeframe chart, let's say it's a one hour chart and below where you want to ride the current momentum of the market, then fine, jumping in straight away at the market is a good idea. Trading the longer time frame charts – look to split your entry orders If you're trading a slightly longer timeframe chart, say a four hour chart or six or twelve or daily or weekly, whatever it might be, those longer timeframe charts where you do get retracements and you have a bigger stop loss there for you can allow for the upward and downward movements in the market, when you get those longer timeframe trades and charts that you're trading, they definitely a retracement entry is a great idea. Well why? What I like about it, number one, you don't have to be at the chart when the candle closes. So if you're not taking a market order that you don't have to be there right at the time that four hour chart closes, let's say. You can come to charts a little bit later and still enter a trade. The other thing is, if you're taking a retracement order using a sell limit or a buy limit, depending on whether it's a buy or sell trade, then the great thing is that you don't have to be there at your computer at the time that that price is hit because the limit order, the pending order, is stored on your broker's server. You don't even need to be there. I'll give you an example, if I'm trading say like a daily chart, then I'll enter and let's say it's a buy trade, I'll enter when the price gets lower first, but I'm not sitting there waiting for that to happen. I'm seeing the trade, I'm saying yeah, I like this trade, I'm entering a buy limit order so when the price retraces and gets lower, it's then filling my buy trade. It means I get in at a lot better price, like a lower price but it also means that my reward to risk on that trade is substantially increased. The keys to trading Don't forget that some of the keys to trading apart from low risk money management are high reward to risk trades. It's really important that you have that. You want to be making several times your risk. When you get a profitable trade and it gets to your full profit target, you need to be making one and a half, two, three, four, sometimes even five to one reward to risk on that trade, depending on the setup of the trade. It's really important that you have the ability to take those high reward to risk trades and by entering part of your position at a better price using those limit orders and retracements is a way that you can really easily do that. Lots of benefits to that. Taking a part of your position at the market and part at a retracement I also do like to take part of my position straight away at the market on most trades that I take.