Have You Ready A Forex Exit Strategy?

In forex trading , it is like any other types of businesses out there

, it requires careful planning and execution. I could say that everyone has some sort of daily participation in Forex market everyday, which is using currency to pay or sell something. We are all in the business of trading. As traders, it is easy to enter the market and exit the market with a push of a button. But once you are in, do you have a ready exit strategy in mind?

Trading is like business that requires planning with strategies in place to show you want to grow your business. In trading, a sound trading plan is required for successful trading. Blindly going into the market is just an indication that you are speculating or gambling your money to see which direction is heading. Like all plans, you will need a good entry and even better exit strategy.

When a business goes bad, what do you do? Do you find a way to salvage what is left or do you just let it go, thinking that the business may recover? Most of us may choose the first option of trying to save whatever we can, therefore trying to devise a strategy to save the current situation. By then it might be too late as all planning should be done even before you start doing business.

In trading, depending on what kind of time frame you are trading, you need to have a proper exit strategy to complement with your trading strategy and timing. For short time frames like 5-15 minutes, an exit strategy have to be planned before you execute your trade as you do not have the luxury of time to devise your exit. For longer time frame like 1hour 4hour, you have much more time and you can still afford to devise your exit strategy.

In professional trading, it is always that these pro traders have an entry and exit strategy in mind after the analysis of the market conditions and they just have to follow through their plan. They placed emphasis on a balanced trade execution, not favoring more on entry or exit. Both are equally important to them.

So if you are like most novices out there who think that all the precise entry points can allow you to hit a sure winner, I can say that you will be in for a surprise as to how the result turns out. I have encounter numerous sure winners just based on the entry points but turns out to be huge losers due to the inability to exit at the right time. Every time before you trade, think about on have you a ready forex exit strategy?

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by: Warren Seah

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