Exiting Your Trade
Trading in the foreign currency market is perhaps one of the most lucrative endeavors out there today. But knowing when to place a trade is as crucial as assessing the right moment to exit. Some traders make the mistake of staying in too long waiting for bigger profits. But all this can be avoided by following a few guidelines.The best way to gage your exit strategy is by using a chart and looking at prices. Check out prior time frames for the highest and the lowest rates. Set your stop loss and your goal. If the signals indicate a possible breakout, set your stop 15-20 pips above or below to give the trade enough room.
Using trailing stops is another way by which to exit with guaranteed profit. Let’s say you bought the EUR/USD at $1.3550 and you set a goal to exit at $1.3565. If the graphics predict an upward trend for yet another few time frames you can move your stop up to $1.3565 and keep the trade open. If it reaches $1.3575, you move the trailing stop up to that level. You continue to do so until the movement begins to show a slow down. Always set goal- make money and quit. Don’t be greedy.
And lastly, it’s always wise to get out of a trade prior to any major news announcement. Staying abreast of economic events is important when you invest money online especially when you trade in the Forex.
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Tags: demo account, foreign currency market, forex, pips, scalpting, strategy
This entry was posted on Tuesday, February 22nd, 2011 at 14:16 and is filed under Trade Forex.