When it comes to investing, the exit order, that is, the appropriate time to withdraw from a position, is of capital importance because it allows you to reduce losses and maximize profits.
Basically in any investment you have to select entry points, make decisions about exit points, stop losses, and obtain achievements.
This text can help new investors who are just beginning to profit from Forex, as well as those who are already familiar with it and who are frequently investing, and who can earn or lose money daily in the market.
When I started trading Forex and made my first income and my first losses, I realized a very momentous aspect of the process when investing.
For me, the appropriate time to choose a position was rarely a conflict (about 80% of my open positions have been successful), the real problem was setting the appropriate time to withdraw from that position.
It is important to narrow larger loss conflicts using stop-loss orders, to curb greed and take profit when you can take it and make it as high as possible.
Many strategies are known, as well as ways to enter the right position at the right time, such as economics manuals, global world events, and combined indicator techniques, among others.
But while joining in a position is optional and the trade can choose whether to let go of good or bad entry point situations, this is not adjustable when it comes to leaving a position. Marginal trading makes it inconvenient to wait long with an open position. More than that, every open position in one way or another reduces the traders’ ability to invest.
Forex: Exit Strategies
Making a preference for the right exit points could be a simple trade if Forex weren’t so tangled and volatile. In my opinion (supported by investment experience) the exit orders for each position should be commuted regularly as soon as new market information is presented.
For example, let’s say you choose a short-term position in GBP/USD at 1.2563, in the time frame you are taking this position the support/resistance level is 1.2500/1.2620. You indicate your stop loss order at 1.2625 and a take profit order at 1.2505. So in this way, this position can be recognized as intraday or as a medium-term (2-3 day) position.
This means that you must end it before the ‘term’ expires, or it will trade in a rather unpredictable position (since the market will change considerably from the time you entered this position.) As soon as the position is taken and exit orders are conditional, you request to follow market events and technical indicators to reapply your exit orders.
Tightening the profit/loss limit is the most significant formula while the period elapses. Usually, if I choose a medium-term position (2-4 days) I try to lower the stop and place the order at 10-25 pips (point percentage) per day. I also keep abreast of global events trying to shorten my stop losses when some very important news could damage my position.
If the profit is already high enough, I try to place my stop loss at the entry point, setting up a win-safe position. The main idea is to hit the balance point between greed and caution. But while your position is older, the profit will be limited and loss cut. Investors should also always keep in mind that if the market starts to move sharply they should be even more meticulous with exit orders, even if the position continues to be profitable.
The maneuvers and habits are a matter of each capitalist. I hope this text makes your readers think about how important exit orders are when it comes to trading and how this will only improve your results.
Reviewing the renowned Forex books is essential to be more competitive in the market, especially if you are inexperienced in the stock market. Being able to patiently decide between so many Forex brokers and being able to distinguish them with different parameters is also decisive when it comes to prospering in the market.