Adjustment
A change to an existing trade or position, such as modifying stop levels, position size, or contract terms.
An adjustment is any modification made to an open trade or portfolio position after it has been established. This can include moving stop-loss or take-profit levels, adding to or reducing position size, rolling a futures contract to a new expiration, or recalibrating hedge ratios. Adjustments are a normal part of active trade management.
How It Works
- Stop-loss adjustment: moving the stop to breakeven or trailing it behind price
- Position sizing adjustment: adding to winners or scaling out of positions
- Rolling: closing an expiring contract and opening the next month to maintain exposure
- Hedge ratio adjustment: rebalancing the hedge as underlying conditions change
Trading Tips
Only adjust stops in the direction of your trade. Never widen a stop-loss to avoid being stopped out.
Have clear rules for when and how you adjust positions. Ad hoc changes invite emotional trading.
Document adjustments in your trade journal so you can evaluate whether they improved or hurt performance.
Related Terms
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