How to take advantage of 'a trade going to plan'.

I was going to title this: How to take advantage of 'a good trade' but really, every trade we place should be classed as 'a good trade' (regardless of the outcome).

Of course, we are not robots and make mistakes but I think you know what I mean.

Anyway, the point is: Can we squeeze an extra few percent profit per year?

I must be clear, the 'technique' I'm about to suggest isn't something to be implemented 'willy nilly'. In fact, I can't remember the last time I did it, maybe 18 months ago.

But something I'm extremely fond of is... Move a stop loss to break even with a view to placing an extra trade.

The scenario requires you to be in a trade that is 'going to plan'. Meaning, the trade is well on its way to the profit target and the reason for taking the trade is still intact.

You then notice another potential opportunity.

On occasions like this, it's completely feasible to 'move the stop loss to break even'. This enables another trade to be placed without incurring any extra financial risk. Meaning the best possible outcome will be +3% rather than +1.5% (risking 1% per trade). And the worst possible outcome remains the initial 1% risk.

Very loose rules are, the initial trade must have reached at least 1:1, ideally with some sort of swing above the original entry (long trade). I prefer a 1hr swing but it's not essential.

More often that not, it'll be a 'risk on scenario', you've placed a long AUD JPY trade, it's gone up, not quite hit the profit target and pulled back a little. The mood remains positive and looks like it's going to continue for while.

It's very simple, move the stop loss to break even and place another 'risk on' trade, on whichever pair you feel appropriate at the time, it could even be the same pair as the original trade.

I must stress, if you find yourself doing this often, I would suggest you're overdoing it. I've only ever felt it feasible once or maximum twice a year. And like I say, it's not been an option during the very changeable environment we've had this last 18 months.

It's just something to keep in the back of your mind for the possibility of squeezing an extra few percent per year profit.

Weekly review to follow, wishing you a lovely weekend.