Lecture 13: Managing Open Positions & Systematic Partial Protocols

Title: Managing Open Positions & Running Down Equity
Date: August 20, 2024
Mentor: Michael J. Huddleston (The Inner Circle Trader)

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1. Executive Summary & Core Objective

Lecture #13 covers active trade management protocols, systematically taking partials during buy/sell programs, and avoiding equity giveback [120, 121, 122].

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2. Core Concepts & Technical Mechanics

A. Systematic Partial Profit Protocol

• Rule: As price expands in favor of your trade and breaches short-term highs (in a buy program) or short-term lows (in a sell program), you must scale out partial profits [121, 122].
• Taking partials distributes risk and ensures the account equity curve grows incrementally even if the remaining runner gets stopped out at breakeven [122].

B. Running Down Equity Concept

• 'Running down equity' refers to managing open trades as price approaches key target pools [122].
• Never allow a winning trade that has reached 1:2 or 1:3 risk-to-reward to turn into a full loss. Move stops to breakeven or locking points after the first major partial is taken [121, 122].

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3. Trading Discipline, Mindset & Psychology

A. Disarming Greed

• Holding for the absolute final tick without scaling partials is driven by greed [122].
• Taking partials systematically rewards the brain for discipline and removes fear of market reversals [122, 123].

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4. Step-by-Step Action Plan & Homework

1. Define exact partial profit targets (e.g., 25% at 10 handles, 50% at major liquidity pool) [122].
2. Practice moving stops to breakeven after taking the first partial [121, 122].

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Reference Source Link:
Watch ICT 2024 Mentorship - Lecture #13 (August 20, 2024) on YouTubeWatch on YouTube