Exiting positions at a right time in Forex trading

The presented article covers one of the most vital sides of trading typically and currency trading especially handling of orders and positions. This includes selecting entry points, making choices about exit points, stop-loss and take-profit of the trader . I hope this article will help new traders, who just started to work with Currency exchange, and also to seasoned traders who trade constantly and frequently make or loose their cash to the market. When I began to trade Foreign exchange and made my first enormous losses and profits I started to notice when imperative thing about the entire trading process.

Whilst the right time to enter a position was infrequently an issue for myself ( virtually 80% of all my open positions had gone into the green profit sector ), the issue was hidden in the determining the right exit point for that position. Not only was it vital to cut my risk on the possible losses with stop-loss orders, but to restrict my greediness and take profit when I'm able to take it and make it as high as I could . There are a few known suggestions and paths to enter a right position at a right time like major commercial stories releases, world world events, technical indicators mixtures, for example. But whilst the entering into a position is optional and trade can decide to miss as many good / bad entry point moments as they wish, this is wrong if we discuss exiting a position. Margin trading makes it almost impossible to attend too long with an open position. More than this, each open position in a certain way boundaries trader 's capability to trade. Selecting the good exit points for positions might be a simple task if only the currency market wasn't so chaotic and volatile. In my view ( backed by my trading experience ) exit orders for each position should be toggled consistently with time and as the new market info ( technical and elemental ) appear. We could say, you took a short position on EUR / Greenbacks at 1.2563, at the time you're taking this position the support / resistance level is 1.2500 / 1.2620. You set your stop-loss order to 1.2625 and your take-profit order to 1.2505. So now, this position can be considered as an intraday or 2-3 days term position. This indicates that you should close it before it's term is over, or it will change into an extremely unpredictable position ( because market will differ significantly from what it was at the time you have entered this position ). After the position is taken and first exit orders are set, you must follow the market events and technical indicators to adjust your exit orders. The most vital rule is to tighten the loss / profit limit as time goes by. Generally if I am taking a middle term position ( 2-4 days ) I try and lower the stop and target order by 10-25 pips each day. I also monitor worldwide events, making an attempt to lower my stop-losses when imperative stories can hurt my position.

If the profit is quite high, I try and move my stop-loss the entry point, making a sure-win position.

The main idea here is to find an equilibrium point between greediness and caution. But as your position gets older the profit should be more limited and losses cut.

Also, trader should always recall that if the market started to act suddenly, they have to be even more wary with exit order, whether or not the position is still showing profits. Each trader has their own trading methodology and habits. I'm hoping this article will make its readers think about such a crucial side of trading as the exit orders and this could only improve their trading results.