After making my initial profits and losses when I just started out trading FOREX, I noticed a few crucial things about the entire process of FOREX trade. I seriously flopped at finding the right exit point for each position I had taken. The right time to enter never really posed itself as a challenge to me. It was essential to cut risks on potential losses with stop-loss orders. More essential was limiting greed and taking profit when I could and making it as high as possible.
I present this article with a view to helping new traders who’re just beginning to work with FOREX and also the experienced traders trading frequently enough and also frequently making their profits or losses in the market. It is the management of orders and positions. This includes choosing entry points, making decisions about exit points, stop-loss and take-profit of the trader. My hope is for every trader (who should already have their own trading habits and strategies) to better their trading results by considering this crucial aspect of “exit orders”. It’s in my opinion, a very crucial aspect of FOREX trading.
Major economic news releases, technical indicators combinations, global world events are among the several known guidelines and ways to enter a right position. Trade could make their decision to forego several good/bad entry points as seems good to them because entering into positions is optional. But this isn’t so for exiting positions. Waiting too long with an open position is made impossible by margin trading but much more is that in a certain way, a trader’s ability to trade Is limited by every open position.
The volatile and chaotic nature of the FOREX market makes picking nice exit points for positions uneasy so exit orders for each position need be toggled consistently as time proceeds and data for the new market shows up.
A rule of thumb, and crucial at that is that as time proceeds, you should tighten loss/profit limit. Normally when I take a middle term position, I make efforts to the stop and target order by 10-25 pips daily. And when the profit’s quite high already, I make a sure-win position by moving the stop-loss to the entry point.
The older your position gets, the more you should cut losses and limit profit. The point I’m making is that equilibrium between caution and greed should be maintained.