The forex trading market is the largest financial market in the whole world. Many of the forex traders do not realize the importance of exit rules in forex trading. If you will be able to understand the following exit rules in forex trading, then will easily exit efficiently. Following are some important exit rules of forex trading are as follows:-
1) If the trader enters in a trade and have an trailing and initial stop in place and the currency is moving in the direction of the trader's trade, then the trailing stops might be moved to breakeven to the similar price or vaguely away from the entry price when say the trade is "x" pips in the profit. The aim of this type of stop is to recover profitability and to diminish drawdown.
2) Several of the forex systems exit positions are either partly or fully, when a definite profit target has been achieved, say at 100 or 50pips.This is used in forex because of its volatility which can cause the price fluctuations and get the trader out at the trailing stop earlier than the trader had a opportunity to take profit. Thus, these targets are being used for improving the profitability or diminishing the drawdown of the system.
3) The training stops are important exit rules which are used in forex trading systems. Their main aim is the guard profits. So, by that small fluctuations in currency price will not stop the trader out of the trade and lets profit to run.
4) The aim of initial stop is to acquire the trader out of the trade in case the trade goes in wrong direction close to the beginning of the trade.
The trader should understand these four important exit rules in forex trading, that what these four exit rules are all about and why these rules are being used. So, these are the important exit rules of forex trading for every forex traders in forex.