I write a lot about how you can find trading opportunities, the trades that have worked out, and the ones that didn’t.
However, identifying and then actioning a trade is just the start of the process because once the trade is live, you have to manage it.
That’s not too difficult when you just have one position running, although there is still plenty to think about and monitor; but it becomes more complicated when you have multiple positions open at the same time, not least because you have to split your attention between them.
Once again, this is where a rules-based approach can help traders, because if you have predefined your risk reward ratios, your stop loss and take profit points, for each trade.
And if you have a good idea about how the trade/ price action should play out in each trade, then it's far easier to decide which positions are behaving as expected, and which are not.
Being aware of key support and resistance levels, moving averages and trend lines in the charts of the stocks, or other instruments that you are trading, means that you can gauge the performance of a trade almost at a glance.
If the performance of a trade is deviating from your expectations, then that's a sign that your idea may be wrong, or that perhaps your timing is wrong
One of the biggest issues traders face is judging the timing of a trade.
The right idea at the wrong time can be just as bad for your PnL as just having the wrong idea.
In fact, it can be worse, because if the idea was correct, it may come good when you are no longer in the trade, and that can be frustrating.
If that happens to you, and it probably will at some stage, don't lose heart.
Because at least you identified the opportunity, and you can go back and look at why the timing wasn’t right, and try to improve on that next time out.
I like to look for a confluence of events to inform trade entry
Combinations of things like higher volume, new highs and lows, moving average crossovers, breaks above, or below prior support and resistance levels can all provide clues about what’s coming next in the price action.
If you see these things happening in the price action, particularly if they happen at the same time, and they tally with your idea, then that’s likely to be a signal to “pull the trigger” on a trade.
Here is one that I have been watching for closely for a couple of weeks, though it's been in my orbit since March, and that is, French drug maker Sanofi SAN FP.
Recently, the stock has bounced away from a long-term downtrend line and rallied nicely. We’ve also seen an MA crossover and breaks above resistances.
However, the candle on 22/08/2025 shows us that the price rejected at €88.44, suggesting that the bulls didn’t have the firepower to take the price higher.
And, until that’s out of the way, the upside potential in the stock can’t be realised.
Source: Barchart.com
Managing a trade well is a skill that traders develop over time
Learning to decide what's a winner and what’s had a “failure to launch” becomes instinctive with practice, or at least it should do.
However, if you find that you can’t make that distinction, then your trading journey could be a short one.
Particularly if you fall foul of Loss Aversion.
A cognitive bias that subconsciously encourages you to snatch at profits and to run losing positions, beyond stop losses, and money management norms.
That’s the kind of behaviour that will quickly erode your trading capital.
Am I missing out?
Even when you are in positions that are moving in your favour, there is always that nagging doubt that you are missing out on opportunities elsewhere, something known as opportunity cost.
“Opportunity cost is the potential benefit that is missed when choosing one alternative over another. It represents the value of the next best alternative that is forgone when a decision is made. Essentially, it's the cost of what you give up to get something else.”
Opportunity cost is always with us; it's something we have to learn to live with as traders.
What we mustn't do is let it (or the fear of it) affect our thinking, because if that happens, you will constantly be looking for a perfect trade (which doesn't really exist), and you will end up with no positions and a lot of anxiety.
Finally, we need to remember not to fall in love with a position.
Narratives change, momentum and interest fade over time.
What was a top dog trade a week or two ago may have lost its lustre, and it could indicate that it's time to come out of part or all of the position.
Source: Barchart.com
But here's the great thing about trading:
If you close a position and later on the stock gets a second wind, you can always re-enter the trade if the conditions are right, as the two-year chart of Nvidia NVDA US above illustrates perfectly.
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