Free trade management tools that every forex trader should have
A trading style when positions are opened and closed by the order that was initiated by the trader is called a manual trading style. A big disadvantage of this trading approach is that it requires lots of time and concentration because you need to constantly watch the market. First, you have to constantly monitor charts to get your trading signal for entering the position. Then, when your trade is active you have to manage the trade, move your stop loss and exit the trade when you are satisfied with the profit or when the opposite signal occurs. It would work perfectly if you can maintain a high level of concentration all the time. However, we all are humans and this high level of concentration is impossible to maintain especially if you are trading on a long term basis. So, does it mean that the manual trading style does not work? Well, not at all! All manual traders use some forms of automation, actually the trade semi-automatically. In this article, I will present to you a few trade management tools every trader should have.
MetaTrader 4 has a few built-in functions for managing active trades. Stop loss and take profit are the ones that you use frequently. Another built-in feature is trail stop loss but this one is very limited and I warmly recommend you to get the more advanced ones. All utilities that will be presented in this article can be found on mql5.com/en/market, an official MetaTrader resource. They can be downloaded for free or for a small price up to $50 (depending on the version). Since my aim is not to promote anyone, I will just point out where you can find those utilities.
Trail stop loss function is a mechanism of protecting the profits when the price goes into our direction. When a certain profit level is reached it moves the stop loss to the preset distance from the current price. As the price continues to move in our desired direction it is constantly moving the stop loss by keeping the preset distance but if the price changes the direction and it starts against our will it keeps the stop loss at the last set price.
The trail stop function is built-in into MetaTrader, however, this version has the limitations. Depending on the broker there is a minimum distance level from the current ant the stop-loss price that can be satisfied. You are not able to set the distance below that minimum level. Advanced trial-stop EAs that can be found on mql5.com will not have this limitation. Moreover, the built-in trail stop is having the same value for the starting point (profit level) and the stop loss distance and it is moving the stop loss point by point as the price moves into our direction. Trail stop EAs will have separate parameters for trail stop starting point, distance and trail stop step. Another very common approach is that trail stop-start level and distance parameter are based on the Average True Range (ATR) indicator. Moreover, many other indicators can be the base for the trail stop function.
Scale-out and break-even is a tool that almost all professional traders use. This is a utility EA that waits for the price to reach a preset profit level and when that level is reached it closes a part of the position and moves the stop loss level to the break-even level. Common entry parameters are profit level and lot amount that we want to close at that level. Thus, this EA is also protecting the profits if the price moves into our desired direction.
Another must-have tool is CloseAll script. As we know, a script is a program that is executed only once. This script automatically closes all active orders that satisfy a preset criterion. In that manner, it allows you to close the multiple orders by one click, which is in volatile market conditions very useful money-saving tool. Many brokers offer this script as a standard add-on.
So, trade management tools are must-have for every trader that prefers to enter the trades manually because they monitor active trades and they help you to protect your profits and to improve your trading results.