What is Set and Forget Trading Approach? Should you Adopt it?

Set-and-forget (S-n-F) is a trading approach in which you set your entry point, stop loss, and take profit levels, let your trade run without further intervention, adjustment, or constant chart monitoring.

Let’s talk about the advantages and disadvantages of this method; who should implement it and who shouldn’t:

Pros:

1. It reduces mental stress: S-n-F approach minimizes emotional fluctuations; the anxiety that comes with watching every tick of the market.

It protects you from making impulsive decisions.

2. Increases objectivity: Adopting this approach means sticking to (and rigidly following) your well-calculated plan.

No room to dance to the tone of your emotions.

3. Limits obsessive watching of charts: Some traders are addicted to chart watching. This behavior mostly results in more confusion and uncertainty.

S-n-F can save you from this addiction; help you take a break from market noise and gain clarity.

4. It can increase confidence: Every winning trade from this method takes your self-confidence to a higher level.

Seeing your trading plan give positive results boosts your trust in your analysis & system.

Cons:

1. It can be risky in highly volatile markets: Unexpected news events or price swings can “dismantle” your stop loss level.

2. Limited adaptability/flexibility: With Set and Forget approach, it is difficult to adapt to/capitalize on changing market conditions.

You miss the opportunity to adjust your trades to different situations.

3. Not effective with all trading styles: S-n-F is most suitable for capturing long-term trends. Consequently, it may not be productive for scalpers.

If you are a swing, positional, or day trader (with high time-frame), set and forget trading method can be beneficial to you.

But be aware of its limitations and improvise accordingly.