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Trade
Three ways to exit from operations in the currency markets
So, our discussion continues – what is most important for the Forex trader? The entrance to the market? Or is the exit?
There is no doubt that both of these aspects are very important if You are seriously going to "make money" in the currency markets, however, it is also true that most traders are much more thinking about the input than the output.
A good exit from the market, however, cannot be overstated, as it may save the agreement before she ends up losing or to profit from it in optimal time. List three ways outputs of the transactions:
1 – Pre-release
The most popular method of exit is achieving a certain amount of profit calculated in pips or in dollars, with automatic closing when you reach that level. It makes risk management easier, but this is not so much logic.
In fact, this "lazy" method of exit from the market, because it requires no mental effort or analysis. It is better to exit the trade, knowing that you did everything You could to make sure that You really chose the best option to exit.
Of course, You can never accurately predict all the twists and turns of the market, but better still to have its own rationale for the exits. Exit from the transaction through the stop loss should be the final method of output. A real solution needs to be justified by the logic of Your trading strategy.
2 – Foot, tested on "history"
If Your terminal has the ability to test trading systems on the basis of "history" data on exchange rates, You with a high degree of accuracy will be able to check which systems are able to make a profit and this profit. But, for God's sake, don't stop there. Along the way you can also test different options for stops and exits, optimizing them and selecting the best.
Looking at two factors; the maximum adverse execution (MAE - maximum adverse execution) and the most favorable execution (MFE - maximum favorable execution), can accurately grasp when the output ceases to be effective.
For example, MAE can show that Your trades will never win, as soon as the course fell by 20 pips. Great! Just place your foot exactly at the distance of 20 pips and rest assured that You chose the right stop.
Similarly, the MFE can show You that transactions rarely bring profit after 50 pips in profit. This will be the perfect time to exit profitable positions.
3 – pivot Levels
Some strategies are complex and unsuitable for testing "story", and this is especially true for such short-term strategies that rely more on instinct, trading flair. But even if such an intuition You have everything in order, You do not interfere with the signal in order to successfully exit the trade.
In the short-term strategies based on the levels pivot level S2, S3, R2 and R3 are the ideal place to exit the trade. Many professional traders-vnutridnevnaya watching these levels, and thus, market rates often reach these levels before a reversal. Such levels are also suitable for setting stops, which should be placed respectively a few pips above or below pivot levels.
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| Category: Forex | Added by: (30.10.2017)
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| Views: 338
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