Sunday, 5 August 2018

Forex Perfect Exit

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Forex Perfect Exit

Best Forex Exit Strategy

Forex perfect exit. Learn more from this simple forex blog from forex friend loan about best forex exit strategy. How important is your exit to forex trading? Importantly, the outcome of every forex trade is dependent on the exit. I hope this will help new traders, who just began to work with forex, and also to experienced traders who trade regularly and regularly make or lose their money to the market.

one of the most important aspects of trading in general and forex trading in particular – managing orders and positions. This includes choosing entry points, making decisions about exit points, stop-loss, and take-profit of the trader.

When I started to trade forex and made my first biggest loss in my first year. I began to notice when a very important thing about the whole trading process. While the right time to enter a position was rarely a problem for myself (nearly 80% of all my open positions had gone into the “green” profit zone), the problem was hidden in the determining the right exit point for that position. Not only was it important to cut my risk on the potential losses with stop-loss orders, but to limit my greediness and take profit when I can take it and make it as high as I can. There are many known guidelines and ways to enter a right position at a right time – like major economic news releases, global world events, technical indicators combinations, etc. But while 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 untrue if we talk about exiting a position.


Margin trading makes it impossible to wait too long with an open position. More than that, every open position in a certain way limits trader’s ability to trade.

Choosing the good forex perfect exit points for positions could be an easy task if only the forex market wasn’t so chaotic and volatile. In my opinion (backed by my trading experience) exit orders for every position should be toggled constantly with time and as the new market data (technical and fundamental) appear.

Let’s say, you took a short position on EUR/USD at 1.2563, at the time you are 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 means that you must close it before it’s “term” is over, or it will become a very unpredictable position (because the market will differ greatly from what it was at the time you have entered this position). After the position is taken and initial exit orders are set, you need to follow the market events and technical indicators to adjust your exit orders.

The most important rule is to tighten the loss/profit limit as time goes by. Usually, if I take a middle term position (2-4 days) I try to lower the stop and target order by 10-25 pips every day. I also monitor global events, trying to lower my stop-losses when very important news can hurt my position. If the profit is already quite high, I try to move my stop-loss the entry point, making a sure-win position. The main idea here is to find an equilibrium point between greed and caution. But as your position gets older the profit should be more limited and losses cut. Also, a trader should always remember that if the market began to act unexpectedly, they need to be even more cautious with exit order, even if the position is still showing profits.

Every trader has their own trading strategy and habits. I hope this forex blog will make its readers think about such an important aspect of trading as the exit orders and this will only improve their trading results.

My Forex Perfect Conditions For Exit

In forex trading, much is talked about the perfect entry point, the combining of various indicators and fundamental conditions to find the very best opportunity. Much less is talked about the strength of a good exit which is a shame since a good exit is just as important.

But while it’s very important to know how and when to enter a trade, it’s equally crucial to know when to exit. Most people have a detailed plan and set rules on how to enter the market, but newbie traders often overlook the importance of having an exit strategy.


Even before you enter a trade, you should already have your exit strategy laid out. Ask yourself the following questions:

How Much Are You Willing To Risk?
Personally, I here believe that risk management is one of the most important aspects of trading. To make money (and avoid losing money), you have to learn how to manage your risk. That’s how you separate traders from gamblers.

Where Will You Cut Your Losses?
Proper stop loss placement can make or break your trade, so it’s something you should consider even before you jump into the market. Make sure you place your stop loss appropriately and give your trade enough room to breathe.

What Events May Invalidate Your Trade?
To say that the markets are unpredictable would be an understatement. Unforeseen events always pop up and they often spark a ton of volatility.

However, there are those which we already know about. Economic reports and speeches by key officials are usually scheduled ahead of time. Their outcomes tend to affect markets in the same way that unforeseen events do. So why not prepare for them?

Always know what the market consensus is and the kind of behavior and reaction you should anticipate. Make contingency plans for when an event comes out differently than expected. Most importantly, be prepared to make adjustments to your trade when necessary.

How Long Do You Plan To Hold The Trade?
For the record, you don’t necessarily have to set a time limit for your trades. However, it’s good to set expectations on how long you will keep it open.

Long-term traders, for example, may hold their trades for weeks, months, or even years. Usually, their trades depend more on fundamental factors that affect markets for a longer period of time. Being conscious of the time would help a swing or position trader keep track of market conditions.

Meanwhile, short-term traders can benefit from this practice in helping them assess whether a trade idea is still valid or not. Perhaps the consolidation on a particular pair has been going on longer than expected and it may be better to just close your trade early.

Having a detailed exit strategy will not only keep you from making impulsive trading decisions and keep your emotions in check, but it can help you manage your risk and stay profitable in the long run.

Forex Perfect Exit Strategy Criteria
One of the most logical ways to exit a trade relates to the strategy that caused you to put on the trade in the first place. It stands to reason that you already should have planned your exit in advance so if you entered on a moving average crossover, for example, it’s usually best to exit on the opposite crossover. Likewise, if you bought on a breakout you should probably sell when the price breaks down. At the very least you should have some criteria laid out in advance for exiting a trade.

Trailing stop
The trailing stop can be used to guard against losses and help to lock in profits as they occur. It can be used on its own or in conjunction with another exit. One of the difficulties when using the trailing stop is knowing how far away from the price action to set the stop as too close means you could take profits too early, while too far away and you might not capture any profits at all. Testing the trailing stop using past data is a good way of finding the right distance.

Price Targets
Using a price target is a good way to exit a forex trade so long as you pick a level that is realistic. If your price target is too far away, your trade might never reach it, which means you’ll probably end up losing money when the market turns back. Similarly, if your profit target is too close you’ll earn too little for the risk that was involved.

Technical levels such as pivot points are often great places to set as price targets for a couple of reasons. First of all, they use recent data so they adapt to market volatility. This means that the key pivot levels are all realistic profit targets. Secondly, pivot points are watched by thousands of professional traders. This means they are better at predicting turning points.

Technical Indicators
The Fibonacci is that can sometimes provide good exit points as is the ATR indicator which works better for day traders.

The Fibonacci is a mathematical sequence that manages to anticipate turning points with extraordinary accuracy while the ATR indicator is a good tool in order to gauge price moves. In forex, unless using a trailing stop, it’s best to be fairly modest when attempting to capture gains. Instead of looking for an arbitrary number of pips as a profit target, halving the ATR for the last 14 days can provide a more realistic expectancy.

The Bottom Line Forex Perfect Exit
The combination of forex perfect exit methods is virtually endless. While one trader may use only trailing stops, others may use a combination of a time, indicator, chart or candlestick patterns to aid in exiting. The ultimate goal is to keep profits and minimize risk. This can be done by using stop-loss orders, trailing stops, exiting when the entry criteria no longer exist, timed exits or strategy specific exits. By using these methods and possibly combining them, it may be possible to retain more profits and reduce losses. (Make more educated trading decisions by identifying major turning points.

Forex Perfect Exit