Removing emotions from trading is one of the most important aspects of trading. There are several ways of doing this but one of the most effective ways is by employing the set and forget strategy. This is also an extremely effective strategy for those that are part time traders, so if you work and your trading is something that you fit around your working hours.
Set and forget strategy requires you to completely work through the trade prior to placing it. So you have to understand your entry point, your exit point and understand and work through your risk management approach. This in itself is a huge benefit. It forces you to do the work that you should do before any trade. There is no new information here. Traders know they should define these points before entering a trade, however on many occasions traders don’t. They leave the profit taker out, for example, thinking they will manage this once the trade is in action. So, the set and forget strategy primarily makes you do what you should do anyway.
Secondly the benefits of the set and forget approach are mainly psychological, at least the ones I am going to focus on today. By committing to your trade completely before you have even placed it, you are completely understanding of the risk involved and the potential profit. With the risk identified you should be less anxious about what happens should the trade move against you. You should be able to sleep at night. Your risk is defined and planned. The Vantage FX platform, allows you to enter all the orders, including a trailing stop. This means that there is absolutely no reason that you need to go back and touch the trade.
This way of trading breaks down stress associated to trading. This is the most stress-free way to trade. Studies show that the set and forget trader is more successful over the long run and this is quite simply because this trader doesn’t allow emotions to take trading decisions. When a trader’s emotions start influencing trading decisions, that is when things start to go wrong.
Some professionals believe that set and forget is like getting in a car, outing your foot on the accelerator and expecting to get from A to B without any troubles. However, from my experience, the psychological benefits from this strategy far outweigh any benefits that mid trade meddling can achieve.
