You need to attain or develop a Forex exit strategy so that you can maximize and secure your profits. One technique that you could utilize to achieve this objective is to advance your stop-loss every time your trade achieves a key target. You could also attempt to move your stop-loss to your position’s breakeven point as soon as your trade allows you to do so providing total protection for your equity.
You must realize that you need an exit strategy in order to attain consistent profits when Forex trading. You can construct one by structuring its design on a favored technical indicator and then closing your trades when it produces a major alert, e.g. a crossover. You could also produce an exit strategy by identifying an attainable price target after you have executed a new Forex trade by exploiting fundamental and technical analysis.
In addition, you should consider the following ideas when developing your exit strategy. Even before you enter a new Forex trade, you must know where you plan to locate your stop-loss. This action is important so that you will not experience a severe drawdown should price advance rapidly against your position. You must determine the size of your stop-loss accurately in order to not only restrict your potential losses but also to allow your new trade room to prosper.
You will discover that many Forex traders base their exit strategies on a predetermined time period. This is a very effective method to utilize when major economic data is scheduled for posting because these events can generate significant levels of volatility. For instance, if you anticipate that a certain reaction to a fundamental event should occur within thirty minutes after its announcement then you could devise an exit strategy that will close your position just after this time should nothing happen.
Forex experts invest significant effort developing their exit strategies and always know when to exit their trades even before they activate them. Expert consensus recommends that after you have activated new trades and have positioned your profit-targets, then you should never relocate them. Instead, your exit strategy should follow the famous trading maxim that advises ‘allow your profits to run‘. For example, if you detect a trend then your exit strategy should help you trade it in such a way as to capture maximum profit.