Controlling our emotions is always a challenge when trading! If you know how to take a “free trade”, you can sit back and relax, get that cup of coffee, really have fun trading. This is one of those trading tips you can really use.
Watch the video below to see it in action.
You can take a “free trade” no matter what instrument you are trading, and no matter the time frame – day trading, swing trading, long term trading – it can be done anywhere, anytime.
Simple trading rules for taking a “Free Trade”
- Place your trade with at least 2 contracts if you are trading futures, or a number of shares or lots that can easily be halved.
- Place a stop for the entire trade at a reasonable distance from the entry.
- Place two targets exit orders, each for 1/2 of the entire trade size. Place one fairly close to the entry price, and the other where you’d really like to take your profit.
- Once the first target order is filled, move the stop to the same distance from the entry as that first target was. Now, even if the price moves against you, you pay only commission. You now have a “free trade”
- Sit back, relax, you are now not going to lose money. Get that next cup of coffee, get that donut, read the paper. Whew!
- If the price continues in your direction, you can move the stop to breakeven, so that this will be a winning trade, no matter what. Even more peace of mind!