You need to careful plan and execute every move in forex. It is really easy to enter the market but the tricky part is exiting it. Unfortunately a forex trader will have greed as the biggest possible enemy. As soon as profits appear the trader starts to think about increasing the amounts gained. The problem is that most people will forget that one downtrend could easily eliminate all the gains that have been achieved.
Using the Best Possible Forex Exit Strategies
Below you will find a list of some of the really effective tricks that forex market experts are using in order to find very good exit points.
Initial Stops – Such stops will be placed when a trade is first initiated. As opposed to trailing stops (presented below) that are placed after we get to see market conditions, an initial stop will be placed as a mean of helping traders to exit markets that are very close to going down when the trade starts. Also, initial stops are closer to starting points than other stops used. This is perfect for minimizing losses.
Trailing Stops – These are used in order to make sure profits are gained. They can function in two ways. The first one happens when it will allow needed space to manage to survive a minor fluctuation. This is done by leaving breathing space so that market drops are covered. Such an approach will ensure that profit will not get wiped with easy. The second one happens when the market will actually fall. This stop will take out the trader really fast so that losses are limited.
Profit Based Exit – Such exit points will be defined when the targeted profit is reached. As an example, if one trader one to exit the market as soon as they reach 150 pips of profit they can do so by using such an exit point. By using this simple policy a trader avoids the possibility of being sucked in by greed.
Market Announcement Exits – Some forex market experts will use this when they do not use stops. They will simply keep track of factors that might affect forex trends or simply use forex alerts. Unfortunately such a method will only work for experienced traders.
Breakeven Exit – Such a stop will always be put just a little above an entry point. They are perfect for those traders that are going to earn profits thanks to the small changes that happen in market listings.