Trading one contract limits your options. You have a stop and a target. You can move the stop manually or automatically. Let’s say you have a target of 40 ticks and a stop of 20, with a reward to risk ratio of 2:1. If you want to move the stop to BE and still maintain a 20 tick margin, you would move the stop to BE when you reach 20 ticks of profit. What if I told you that you could move the stop at 10 ticks of profit and guarantee yourself a zero loss trade?
Using two contracts where one comes off early and one is a runner, gives you a better chance of a winning trade, while increasing the likelihood of a zero loss trade. Wouldn’t you rather break even than have a loss? (Note that if the trade moves against you from the start, there is a chance of losing 40 ticks, so this is not a guranteed setup.)
The idea is to take one contract off quickly, and move your stop, so the second contract still has room to move, without a net loss. If the first Target is 10, when it comes off, move the stop to BE-10 (or-9 if you want to account for commissions). Then the second contract still has 20 (or 19) ticks of wiggle room before it gets stopped out, and it if does, it it a zero loss trade. If it “Runs” then every tick it moves above 10 is net profit. You can move the stop to BE when the second contract gets to 20, and you are guaranteed a 10(or 9) tick profit. You can manually move the stop from there or just leave it at BE.
The runner now has a chance to really run, because you set the target high enough to give you a good win. If it looks like price is going to keep on moving, you can move the target higher, to take advantage of the trend.
Example: 1 point = 100 ticks. Preferred stop is 6p = 600 ticks
Trade Window Setup: