I have a really cool lesson for you today that is going to give you a gift and help you manage your trades a heck of a lot easier. In today’s lesson I am going to give you a trade management indicator and show you exactly how you can download it and start using it in your trading so that you don’t have to be up all night waiting for price to move so that you can get to break even.

This indicator will take care of that for you and get your trades to break even for you which is a huge relief for a lot of traders that have jobs or that the market is in a tricky time for them with their sleep pattern.

These traders who have normally had to set price alarms with a service such as AlertFX or get out of bed at 2am in the morning to check their trades and then back out of bed to get to work at 6am can now SLEEP, and use this indicator to manage their positions for them.

First things first though, we need to discuss trade management.

How Important is Trade Management?

A huge part of trading that we concentrate on here at Forex School Online. especially in the members area is trading management. This is something that not many traders concentrate on. A lot of traders prefer to spend their time hunting for new trading systems or perfecting their entries, trying to find the best possible times to enter the market. There are a couple of major issues with this approach.

The first is that as traders we could go on forever trying to perfect our entries. Whilst a trader is always learning and continuously improving, there comes a point where you have a profitable trading edge and doing more and looking for more information will start to affect your profitability.

Whilst trade entries are super important, how a trader manages their trades is going to determine if they are ever going to be a profitable trader or not. If you did not get that, then please go back and read it again because it is super important. That is how important trade management is. It decides who in the end will make money and who wont.

Why is it so very important? Because, as I went through in a lot of detail in my previous lesson A Study on Thinking, Feeling and How Professional Traders React to Emotions in Their Trading the difference between the trader who has success in the markets and those that don’t, has a huge amount to do with how they think, act and behave with their trades.

There are a lot of examples of how trade management mistakes have crippled super profitable trading methods and I know every single trader reading this right now bar none, has made some of these trade management mistakes where they have finished the trade and had the thought of something similar to “I wish I had just stuck to my own trading plan” or “Why did I mess around with my stops mid-way through the trade?”.

Just one example of this is the story of trader Jimmy, who is normally a pretty solid trader; Trader Jimmy enters into a short trade. Jimmy has a stop on because before he entered the trade Jimmy had worked out an obvious area that if price moves past, then he would be happy to be out of the trade. Jimmy had picked this area for the stop as it gave him the highest chance to stay in the trade, whilst at the same time a trigger point. In other words; if

Jimmy had picked this area for the stop as it gave him the highest chance to stay in the trade, whilst at the same time a trigger point. In other words; if price moves past the stop, it is a clear signal that the trade has failed. Jimmy gets entered into the trade. The trade moves a little against Jimmy. Jimmy starts getting that awful feeling of “Uncertainty” that all traders hate.

Instead of just sticking to the pre-trade plan and letting the trade “do its thing”, Jimmy convinces himself that the right thing to do is to take the trade off the table now. Jimmy tells himself that this is the best thing to do because he is cutting his losers short. Jimmy has heard this a thousand times before, so this has to be the right thing to do, right? That’s what Jimmy tells himself to feel better anyway. I am sure you can guess what happens in this story.

Literally moments after Jimmy has taken the trade off, price swings around to turn into a big winner. Price never even went close to Jimmy’s stop loss level. Remember; Jimmy had strategically placed his stop before the trade when he was thinking at his most logical and so price was a good chance to not go near the stop, but when in the trade Jimmy was not thinking like this I,e; logically. Jimmy was just thinking – I am Losing Money – I Don’t Want to Lose Money – How Can I Stop This Awful Feeling I am Having at This Moment?

This is just one example, but there are many real-life everyday scenarios that are getting thrown up in the markets that I am sure you have also experienced at one time or another that get played out over and over by traders every day in the markets. These moments are what can be crucial in determining profitability and success.

Don’t be a Monkey

As you can see from just this really brief example above; how a trader goes about managing their trades is crucial. Another really simple way to put this is; without the spread, you could flip a coin and in theory get a 50% win rate after enough flips of the coin and the only thing that would determine if you made a profit would be how you managed those trades.

Or put another way; even a monkey could get winners 50% of the time, but only a skilled and well-educated trader could consistently manage their trades correctly.

A Monkey Smashing Out Winners on the Forex Market

The two most common questions I get asked around trade management are around time frames and risk reward. Normally these questions are something along the lines of;

“I have been taught to average a minimum 2/1 risk reward or 3/1 risk-reward is this correct?”

And the other question I get on time frames regularly is normally something like;

“I normally trade the 15 min charts. If I trade the daily charts, wont I have to hold my trades for three or four days and manage my trades that whole time?”.

These are great questions, but I feel that often traders come to trading for the right reasons when they first come to trading and then somewhere along the lines they forget what the whole point is.

Traders normally come to Forex trading for two main reasons. The first reason is to make money and the second is for extra free time. Somewhere along the lines traders forget these main goals and start reaching for other things.

Traders are getting themselves so tied into knots trying to achieve some made up fixed risk reward that they have set for themselves and it is hurting their results. I discuss this in the Forex Risk-Reward Myth .

The goal is to make money and profits, not to make some new risk-reward record. I am sure you did not come to trading to have the biggest risk-reward and at the end of the month or year when you are looking at your profits, the size of the risk-reward does not count for anything, profits do.

The exact same goes for the time frame question. It does not matter if you make profit over 5 seconds or 5 days. What is important and does matter is that you make profit. That is what you need to concentrate on.

What is Break Even?

So what exactly is “Break Even”? Good question I hear you ask! This is a common question and is actually one of those questions that a lot of traders have, but they don’t want to ask it in front of other traders for fear of looking silly and so they don’t say anything and go on not understanding properly what it means.

There are a lot of funny questions like that. Traders would be far better just posting them up in the comments section or wherever and finding out the answers because they would find out that there is a heap of other traders exactly like you who did not understand as well either. As we say in the Forex School Online members area ; the only silly question is the one you don’t ask that then ends up costing you money in the markets.

The easiest way to explain break even is; break even is moving your stop loss into a position where you can no longer lose money. Break Even is normally thought of where you would move your stop loss into your original entry position so that if price turned around on you, you would be stopped out at the same price you entered and not take any loss, thus the trade would be a break even trade.

For example; you enter a long trade at 1.10 with a stop at 1.05. To start this trade you could potentially make a loss if price went against you. Price breaks and makes a move higher in your favor. You then decide to make the trade a free trade and to move to “break even” by moving your stop from the original position to where your entry was, so your stop would go from 1.05 to now 1.10.

This is known as break even because if price would be to turn around on you in this example trade, price would stop you out, but it would stop you out at the same price that you entered the trade at and so you would not win anything, but you would not lose anything either. It would be known as a “break even: trade”.

Some traders take this one step further. In the example we have just used you would have been taken out at the same price you entered at, but you would have paid the spread. Some traders will add the spreads cost into their break even equations when working it out so that their break even price means it is their entry price plus however many pips they paid or roughly will pay. As you will see; the indicator can do this for you as well.

The Forex School Online Break Even Indicator

Installing the Indicator:

Even before you download the indicator, you need to make sure that you have the correct charts. Todays indicator will only work with Metatrader 4 charts or MT4 as it is better known. The charts we use at Forex School Online are New York close 5 day MT4 charts. This is for a very specific reason which is explained in the link below. You can read all about this and download your copy of a FREE Correct New York Close MT4 demo here;

Download Free Demo New York Close MT4 Charts

With the new build and updates of MT4 it is super important that you download and install indicators and EAs correctly into their new spots.

PLEASE NOTE:  What you are about to download and save is an Expert Advisor (EA) and not an indicator. This is important. The previous lessons on Forex School Online such as; How to Make Any Time Frame on MT4 and Automatically Manage Your Trading Money With the MT4 Position Size Indicator  were discussing indicators and not Expert Advisors (EAs) and because of this they were saved into different folders.

Please make sure you save your EAs into your brokers MT4’s Folder on your computer. For example; IC Markets MT4 Charts. This will normally be on your computers Local C Disk or C-DRIVE.

Here is an example funnel of where you will need to store the EA: Local C-DRIVE > Program files > IC Markets MT4 Charts > MQL4 Folder > Experts Folder .

See the pictures of this process below;

> COMPUTER PROGRAM FILES

> MT4 CHARTS FILES

> EXPERTS FOLDER

> THIS IS WHERE YOU SAVE THE INDICATOR

The easiest way to do this is when you click on the indicator it will open up and ask you where to save it. You need to save it EXACTLY where I have just outlined.

An even easier way to do this is by using your mouse and right clicking the mouse and then hitting the Save As option. From there you can save it in your experts file as per above.

Lastly on this and super importantly; you cannot open this file or any other MT4 indicator or expert advisor on your computer or laptop. These files are built for MT4 only. The only thing you can do is save it. If you attempt to open the file, your computer is not going to know what to do with it because it does not understand the file type. Please just save it and let MT4 deal with it.

Setting Up Your Charts For The Indicator

After downloading the indicator, please make sure that you re-start your MT4 charts by turning them off and then switching them back on if you did not have them off when adding in your new Forex School Online Break Even Indicator.

IMPORTANT: For the indicator to work you will need to allow Expert Advisors. To do this, please go into your MT4 charts and into the Tools > Options which will then bring up a large box with a group of options like the picture shows below; Please make sure that the box “Allow Automated Trading” is checked and then click on OK. See picture below;

How Does the Indicator Work?

As I said at the start of this lesson; this indicator is super cool and really going to help you once you get the hang of it and work out the best times to deploy it in your trading. Moving to break even and more importantly “Knowing” where the correct spots are in the markets to move to break even is absolutely critical.

At the top of this trading lesson I spoke about just how important Forex trade management is and also about how it literally is the difference between a trader either making profits or losses. This indicator is great, but you still need to make sure that you work on understanding and improving; when the correct times are to get to break even and when the best times are to lock in profit.

This indicator works by moving your stop from its current position and taking it into break even at a set trigger that you have automated or decided. This means that you don’t have to be at the computer or constantly checking charts or phones or setting alarms to manage your trades to get your positions to break even.

This indicator will also allow you to lock in profit. When the trigger for the indicator that you have set up is hit, you can decide to not only move to break even, but also lock in and protect profits so that if the market does swing around, you will be protected. Cool hey!

Opening and Using The Trade Management Indicator

To open up the Forex School Online Break Even Expert Advisor you will need to open the navigator panel from inside your MT4 charts. The navigator panel holds all of your account information, your Expert Advisors (EA’s), your scripts and all of your indicators.

To locate the navigator panel and open it up, please click on the yellow icon under the menu buttons as shown in the picture below;

To open the indicator using the navigator panel, please click on Expert Advisors and then locate the Forex School Online Break Even Indicator. To attach the indicator/expert advisor to the chart you wish to use it on you have three options.

1. You can double click on the indicator
2. You can right click with your mouse and then hit the “attach to a chart”
3. You can with your mouse click on the indicator and then holding the mouse down drag it onto the chart you want to use it with. When you drag the indicator onto the chart, the indicator will open up.

PLEASE NOTE:   When you have loaded the Forex School Online Break Even Indicator onto your charts successfully and everything is working as it should, in the top right-hand corner you will see a nice pretty smiley face! See example below;

Two Major Functions of Break Even Indicator

Now that you have successfully downloaded the indicator, you are in the best possible mindset and the indicator is open on your charts, it is time to start using it. Luckily it is a pretty simple and easy to use indicator – once you know how.

There are two main functions or inputs. These are;

Break Even Trigger in Pips – This is the amount of pips you choose to set for price to move before the indicator will activate and your stop will then move to break even or into profit.

Break Even Lock In – This is the coolest part of the indicator because you don’t just have to set your trade to break even and this is the part you get to set it with. In here is the amount you want to move your stop above or below your entry. This allows you to not only get to break even, but start locking in some profit.

What this indicator allows you to do that most other break even indicators don’t is factor trading costs into your trading as I discussed above, such as spreads or trading commissions. This is so that your break even is your true break even position. If you wanted to lock in 10 pips profit you would put “10” in this input, but if you wanted price to just move 1 pip above/below where your entry was first set you would put “1” for 1 pip.

( Note: both of these inputs are entered in pips);

The pictures below show how these inputs look on the charts;

Basically, what you are doing is deciding with the “Break Even Trigger Pips” input how many pips away you want price to move before the indicator will activate or trigger. This is when the indicator will go off. When the indicator goes off it will call into action the “Break Even Lock In” that you have also set up.

The Break Even Lock In is the amount of pips you either want to move to break even or protect profit. So if you wanted to lock in 20 pips profit, it is now at this stage that the stop would be changed to reflect this.

I have one final example to really help you cement it in; you enter a trade to go long. Price moves in your direction. You have your break even indicator all set up ready to go and so you leave your computer and go to sleep. Price moves 60 pips into profit. This is where you have your “Break Even Trigger Pips” input set to go off.

The indicator activates and because it activates it then calls into action the “Break Even Lock In”. In this trade you only wanted to move to break even +1 pip and not lock in any profits just yet and so the stop loss moves up only by one pip above your entry.

You wake up in the morning feeling super refreshed and check your charts to see you are at break even automatically and price has roared higher.

IMPORTANT NOTE: Make sure you test and trial this indicator first on a demo account. It is super important with anything new you are using that you test it and come to grips with it first to understand all the ins and outs of how it works.

Why is it Important I Discuss Trade Management and Not Just Give You the Indicator?

There will be some of you that just want the indicator and to move on, and for those traders you are able to do that by getting the indicator and the information you need. It is super important however, that before I give you the indicator, I also teach you the necessary information to understand some really essential key points of not only the indicator itself, but also trade management.

It is my job to educate you and help you achieve your trading goals. It is also my job to help you become a better trader and by learning to manage your trades more effectively with the correct mindset it will most certainly help you do that.

Whilst this indicator can really help you with your trade management and will be a real blessing for those traders that will no longer have to either get out of bed or set price alarms to move trades in the middle of the night to break even, it is only as good as the trader and inputs put into it.

You need to remember that you are the captain and the one guiding the ship through the choppy waters of the Forex markets and the decisions you make as captain are crucial.

If you want to learn more strategies and techniques for using price action to manage your trading, then check out the Forex School Online Price Action Course .

I would love to hear your comments or questions about this indicator or if you have some cool ideas for the new indicator project, then post them below in the comments section.

Safe trading,

Johnathon

SPECIAL NOTE:  I am going to be developing a new MT4 indicator/expert advisor. I use MT4 for all of my trading and really love it because it is a super stable platform that is particularly easy to use, and it is able to handle huge amounts and varieties of trading without freezing or playing up, unlike a lot of other platforms. It is also a great platform to be able to add expert advisors, which is a real bonus.

Basically, it is just very simple, yet powerful.

This is not to say it doesnt have its downsides, because it does. One of these downsides I will be looking to fix with a new indicator or Expert Advisor so that I will be able to make my trading a heck of a lot more simpler and easier.

If you want to follow along and learn about exactly how I develop this indicator and potentially even have some input into how it gets built, then sign up below.

A Trade Management Indicator That Takes Profit & Moves to Break Even!