In forex trading making correct entries seems to be an easier task than making exits. Most traders suffer from exiting-too-early syndrome and therefore missing out the extra points. In most cases bad exit taking causes you to miss out on more than half the profit you could have. What are the key factors when it comes to staying in or exiting? Is it more profitable, for example, to just set the stop and the limit, and wait until either of them gets reached? Does the understanding of exits available help minimize losses and lock in profits?
How many times has the market missed your target by just a small fracture, and then continued moving in the direction you have predicted without you “on board”?! Or, on another unfortunate trading day, forex market simply misses your profit target and leaves you with nothing, or even worse – loss! Obviously making profits is the hardest part in forex trading. It can take years to figure out how to enter but not how to exit.
No matter how complicated, if you want to make money you will have to find a point to exit. Optimizing the trading strategy is the key to forex success. To track and understand decisions better, some traders create a trade log and write down the reasons each time they exit a trade. It is time consuming and may take weeks, months or even years to understand the flaw in the current strategy. However, usually after the first month the trading pattern immerges and traders can mortify the flaws to maximize returns.
Figuring out exits is similar to predicting the future. It is extremely difficult if not impossible. Knowing for sure where to exit requires aiming for a specific target. However, keep in mind that setting a target restricts the profits from running.
Before you enter a trade, consider the following factors. Firstly, you should plan out the length of the trade. Secondly, try to figure out the risk you are willing to take. Last but not least, ask yourself when a good time to get out is.
Every trader is different and you need to find what suits you best and stick to the plan. Also keep in mind that it is impossible to always be in a win-win situation, so you need to calculate your risk/reward ratio and whether the trade is worth taking before you actually place a trade.
This is quite general, but here are some things to consider:
1. Fractals.
Using fractals allows you to know when to change the stop and to follow the market down as it goes.
2. Resistance/Support. You can decide on an exit on some resistance/support area targeted on a higher timeframe.
3. Fibs. Fib extensions are your magic wand. Use it for your own good.
4. Moving average. Set a stop right behind the moving average.
5. Last but not least, consider scaling. Consider closing half at the original target, run balance and see how things progress. If the market pulls back to the original target, then you can simply close the balance. In other case, run a trailing stop.
Most importantly, when you decide on a strategy, stick to it. You cannot control the market, but you can get a hold of your forex trading behavior.
Also, you always can decide to buy profitable forex expert advisor.
Is Forex Robot Necessary For Success?
After plunging into real trading, a newbie in forex trading might face the undeniable reality of not being very successful the first month or so. A swing from overconfidence to feeling inadequate about the losses may fabricate the idea of getting a mentor, a so called forex guru, to magically lift the unlucky spell off the fruitless trading decisions. Can forex advisor really get you out of misery and are these forex gurus worth the money spent?
Being self-taught forex trader has both advantages and disadvantages, but at the end you learn the culture and pick up the trading skills along the way. Shortcuts sometimes lead to lapses in knowledge and that should be avoided at all cost. After all, forex trading requires 101%.
A good forex expert advisor might be able to give insightful explanations and therefore shorten the self-learning curve immensely.
Being self-taught forex trader has both advantages and disadvantages, but at the end you learn the culture and pick up the trading skills along the way. Shortcuts sometimes lead to lapses in knowledge and that should be avoided at all cost. After all, forex trading requires 101%.
A good forex expert advisor might be able to give insightful explanations and therefore shorten the self-learning curve immensely.
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