Risk management is certainly an important aspect to consider before initiating a trade, but it’s EQUALLY important to manage risk throughout the trade to reduce losses and preserve profits.
A rock climber knows he must anchor himself to the wall along the way up, just in case he slips. But as a climber ascends, a low-altitude anchor becomes less useful, so he raises it along the way.
Trading is no different in that the stop loss we initially set for a position may not be appropriate once the trade has progressed, so it may need adjusting along the way.
(In case you missed them, here are links to Part 1 and Part 2 and Part 3.)
Here’s Part 4 on stops. Click the full-screen button in the player for best quality: