Actually, Forex trading is not easy but once you enter in to a trade, exiting from it becomes even harder. Even if the trader knows to trade successfully the hardest part he or she will have to face is when closing the trade. If the trader is trying to learn how to close the strategy then it is considered as the exit strategy. It is definitely frustrating for the traders, since closing a trade is not easy. The closing strategy of Forex overlooked in the Forex education too. Before the trader trade, they think about which currency to trade and which trade to enter but they rarely think about the exit and how to exit. We will explain the reason for the closing trades to become difficult and some of the useful methods too.
Why trade exit is difficult
There are major reasons for trade exit to be so difficult. The reasons are many traders think trade exit as simple as trade entry. The logic behind this is that the traders assume good long trade exits are as good as trade entry. But it is not the case if you consider certain strategies to enter the trades, the strategies for trade exit will be something different. As a trader you need to do the technical analysis in your trading charts to find the best exit in them market. The fact is that whether you are targeting for profit from the short-term or longer-term movements or else the both. Before you decide the exit trade strategy which is suitable for you, you must decide whether you are targeting short term or long term profits. If you believe that you can win a sixty percentage of your trade then you can be assured that you will make profits. Then you don’t have to worry about the trade exit since you’ll be making profits.
The stop loss
The common way to control risk is by using stop loss, when you meet a point where you cannot bear further losses then the stop loss is your rescuer. A stop loss is faced before the trade, meaning at the time of the trade and figured out in advance. You can pick the stop loss rate using many methods, but it should be placed at the reasonable spot where the trader cannot expect the risk anymore. If you look at the professional traders than you will notice that all of them use price action confirmation signals in their trading charts to set their stop loss in the market.
The trend line trade
If you see a trade which clearly defines the trend direction in which is a debatable trend line can be sketched, then it can be the clear sign for good exit. Sounds little bit complex? Let’s break it down. Every single trend in the forex market tends to change after a definite interval. So if you see price breaching a trend line in your trading charts then make sure to exit the trend since you this a clear sign of imminent trend reversal in the market. But when you draw the trend line in the market make sure to draw them in the higher time frame since it will greatly reduces your chances of error in the market. If you look at the professional traders trading style then you will notice every single one of them is trading the higher time frame in the market to make profit out of this system. But once the trend line broken they simply close their losing trades in the market and wait for the next trading opportunity.
Summary: You should understand that exiting from trade is harder than the entry, so as traders you should give enough attention to the exiting strategies. By learning important trade exiting methods the traders tend to learn to hold them self-steady in the Forex market. Actually, it can be harder than learning the strategies of winning the traders or entering the trades but still it’s a MUST learn. As traders, if you do not know to control loses then remaining in the market can be only a dream. So you should be knowledge in the field of exiting the trades.
