How we manage our positions

Today’s Remek! Premium trades on the 6E and 6S provide a good example of our trade management rules.

  • Most of our trades being what you’d call ‘pullback trades’, our stops are near the opposite Keltner, out of the market’s expected noise (measured in ATRs). Initial stops can be tightened, but never increased. Say, we enter with three contracts.

  • 1st target: 1R or previous pivot, whichever is closer.

  • 2nd target: 1R.

  • 3rd target: runner, trailed behind pivots (often on tick charts) until stopped out.

  • Make sure you define (and regularly review) your own trade management rules and follow them consistently. Use this table: to size appropriately. It is advised that you stick to the “Max. allowed risk per trade (% of account size) = cca 3% rule. (You’ll be surprised how many losers in a row you have to expect statistically, even if you follow your rules perfectly! See red numbers in the table. Remember: your account must be able to withstand the worst-case scenario without a margin call.)

  • The correct stop required for the trade exceeds, in dollar terms, 3% of your account size? Simple: you have to skip that trade.

  • Small account? The math doesn’t add up? Consider the micro contracts (as long as they’re reasonably liquid).

  • Bottom line: your primary focus as a trader should not be ‘to make money’ but “to stay in the game”. Focus on that and things might just start to happen.