Should You Scratch A Trade When It Comes Back To Entry?

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WHY SCRATCH?
Logical answer: If A level is a good buy now, why when it comes back you want to sell it?
Risk Perspective: Risk of loss is accepted when trade is entered
- So 2 outcomes profit or loss 50/50
- Scratch a pullback: Losses stay same 50%, winners now halved 25% and 25% scratch
Practical Considerations:
- What is the target on the trade?
- At what point should the trade not come back? A hurdle/confirmation
- Have you framed/accepted the risk on the trade?
- Would you expect a test back?
- What is the nature of the trade?
- Have you gained new information?
Richard shows examples in Gold on a 5 minute chart.
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[@alfredhitchcock7386]

More trade management videos please Richard, you're very good at explaining things. Could you do a video on how to add to winners? I am on the fence on whether adding to winners is beneficial or not, and perhaps only valid for thinner, momentum style products like GC or CL, whereas it might not make sense in a mean reversion leaning market like ES.

[@satoshigerbil8789]

Richard, I feel like you're my father telling me about the dangers of the world lol

[@closingkentucky2813]

Richard; Thank you again for sharing your wisdom and experience with us.. I can't understand why these videos don't have a millions plus views at every shot!! amazing content once again !! please keep it up

[@MidasTouchTrading]

Absolutely fantastic video, one of your all-time best! More of these trade management vids please! Thanks.

[@bigcapadon]

Very good information and example here.. thank you.

[@michalszalinski8359]

Thanks for your explaination Richard. You're always very insightful. I got caught in precisely this situation the other day and while I reasoned it out similar to you my execution was poor and I ended up banking a loss. It good to know there is no magic to this, just a reasoned way of thinking through the information the market gives you at any one time.

[@wntu4]

Outstanding.

[@davidbuffalo6821]

As a day trader, I set rational target profits based on volatility so that I am assured in probably 80% of all trades of having a winner. The only thing left is to protect the trade with a stop loss in case of a catastrophe, when my trade goes above breakeven by a percentage of the profit points established by the target, I move to breakeven, thus allowing the trade to be a risk-free trade (with commissions added). In that way, I care not that I have a low win percentage. I have assured that I have an equity curve that moves upward from left to right. It is truly that simple for me. There is no need to rationalize all the stuff about commissions or anything else. What is required for what I have described is 1) a rock-sold rules-based trade plan for which no exceptions are made and 2) the discipline to execute that plan the same way every time. That means that I sit on my hands for the balance of my two-hour trading window until my trade setups happen.

[@AxiaFutures]

Thanks for sharing!

[@shibaprasadBiswas]

Sir I am not getting the meaning of " scratching the trade" for not being a native speaker .. Please explain it 🙏🙏

[@matsgoodyear3068]

To quit the trade and get out of the price returns to your entry.