Feature in Focus – Trade Management

Published on: November 07, 2022

Hi,

In this video, we will talk about trade management. 

If you are day-trading, holding positions for a couple of hours, or scalping, holding positions for a couple of seconds, trade management is key to your success. Daytradr platform offers the tools that will help you manage your trades.
From the moment you get in, you need to see other traders coming behind you, supporting this way your position. If you buy the market and immediately prices run against you, clearly you got in too soon, and you need to see how strong the volume is on the sell side, so you can decide if it’s better you get out, or hold a bit more if sellers don’t seem to show enough strength.

Feature in Focus – Trade Management

Notes:

Hi all, 

In this video, we will take a look at how to manage our trades using some of the features within daytradr, namely, the depth and sales center line, the current trades’ column, and the strength meter.

When we open a position, we want to see other traders coming in behind us, supporting our position, and these tools do exactly that.

Let’s place an order to sell the market.

You will notice that as soon the position is opened, the current trades columns are cleared, the depth and sales is recentered, and the strength meter is reset.

What this does is allow us to have a better understanding of what the market is doing from the moment we get in.
By clearing the current trades, we can better see the volume being traded. By re-centering the depth and sales, we can better view how many ticks the market move above and below our entry price, and we can better view if the market is ticking against or in favor of our position.

And by resetting the strength meter, allows us to see the balance between buyers and sellers, which side of the market is showing more strength? Are we seeing the traders coming into the market, supporting our position?

All this information, allows us to better manage our trade. We can get a real view if our initial market reading was correct or not.

In this first example, we can see that the market only ticked against us 1 tick and immediately started running in our favor. As we said before, we want to see after our entry, traders coming behind us, and looking at the strength meter, we can see that.

We are seeing a 2:1 imbalance after our entry which is something we like to see, indicating real sell side strength, and as the market continues to move lower, executing our first target, we move our stop loss to break even.

After a couple of minutes, prices pullback to 1 tick below our entry price. We can see the balance between buyers and sellers has diminished, but still holding more volume on the sell side. We have our stop loss in place, so the position is protected.

3 more minutes have passed, and we’ve been trading between 96.25 and 97.25 when finally prices break to the downside again. Our second target gets executed, and we move our stop loss to breakeven + 4 ticks, where prices last traded before moving lower again.

Our last target gets executed, closing this way our position.

Let’s now look at another example, and here we will look at market correlations.

We have the NQ, YM, and ES.

We place an order to buy the ES, and notice that all 3 depth and sales recenter at the same time, and clear the current trades columns as well.

This is by far one of the best options when it comes to trade management when trading correlations. We can immediately see which markets start to tick higher or lower first, and the volume being traded.

When buying the ES, if NQ and YM are ticking lower, it will be very difficult for ES to move higher, so if our reading was to markets push higher, but they are actually ticking lower, our position would be in danger. 

On the other hand, and in this example, NQ and YM are ticking higher, which is a good sign for our long position in ES. We can see some strength being on the buy side although, ideally, we would want to see 2 times the traders on our side, which we do not have right now, and with prices right below the first target, we decide to move our stop order upwards right below the entry price.

Our first target gets executed, and we recenter the depth and sales again, so we can now better analyze what will be done from this last move higher. 

We can see that the upwards momentum has paused, and none of the 3 markets are showing interest in moving higher above the center line. We can see in the strength meter that sellers and buyers are almost balanced, and then, we have a fast push downwards that ended up executing our stop loss.

Summary

Like we said at the beginning of the video, all this is optional and to set it all, you need to go to the depth and sales settings window, then go to the Trading tab, you will enable the Clear Current Trades on a new position, and also enable all windows option. Enable also the recenter on a new position and all windows, and then go to the Power Meters tab and also enable the reset on a new position.