Translated from Russian by Google Translate
2 Сентябрь 2009

Effective strategies to exit the market

There are many recommendations based on the technique of entering the market. There could be various elements of technical analysis, and it’s worth noting, many of them are really beneficial and provide productive signals. But the problem is that any forex strategy should combine both the possibility of identifying the entrance and exit from the market. Forex strategy, which focuses only on the input, is dead. Therefore, one of the priorities that set themselves professionals, developing their own tactics, is the exit strategy from the market. That’s about it in the future and will be discussed.


The first thing that should start when developing a strategy is to identify levels of risk. Speaking in other words, you will need to determine the critical level of profit-taking and limit losses. Numerous observations show that in most cases the cause of failure (there is a reset of the deposit) are two components: weak discipline and failure to comply with the rules of risk management. Simply put, reckless management of assets.

Therefore, any forex strategy should primarily be based on the exact distribution of the proportions of profits and losses for different situations. For example, in the case of growth position and, accordingly, increase profits, you must first determine for yourself when you should fix your profit. And in the case of the situation is not in your favor, you must be clear about how you act in jumpstarting the situation and move the price against you.

It should be noted that the formation of forex strategy should be to keep the landmark at one of two components: time and price.

The exit strategy is based on time.

The behavior of prices at different time intervals may be different, hence the difference in the approaches of forecasting and strategic planning of trade. If your forex strategy is based on time, the action must be based on its behavior. For example, if the price is going up, thus increasing our profits, but the strategy focused on the time range of a signal that it is time to close a position, in this case, you should definitely follow the chosen strategy, ie to fix profits at a particular time, regardless of future price behavior.

One may ask: «Why is it so worth doing?» To do so should be in when you choose a certain length of time and analyze the behavior of prices is in this range. You choose the critical point, which has reached the price at a certain time and on this basis concludes: how price is behaving in a certain period of time, some variations may occur, etc. That is, forex exit strategy from market-oriented time frame transactions, should fully conform to it.

The exit strategy is based on the price.

The exit strategy for a price no less popular than the previous one. This strategy increasingly used to trade, so as to plan goal in the form of a particular point is somewhat simpler to analyze than the fluctuation of prices in a certain time interval. Perhaps it is. You choose what appeals to you more, but given the fact that the two strategies described are serious differences, so if you use any of them, you should not rely solely on the data of another.

An example of an ideal market for trading costs is as follows: you open a long position. Gradually the price moves into a phase of growth. You wait until it reaches a specified mark, and closed, fixing thereby profit.

It should be borne in mind that the importance of playing an analysis of different time schedules. For example, if you trade the daily chart, you have to include the shorter time intervals. It will tell you the moments when you need to make a correction in feet apart. An example of such an analysis presented in the graphs.

Forex strategy

Strategy market Forex

Another important point that should be considered when entering the market, is the placement of stops. Your forex strategy lies in the fact that pre-calculate all the possible moments of change in market sentiment and try to advance to protect themselves from losses. Therefore, entering the market, you should immediately place a stop at predetermined levels.

Another important strategic task is the time of exit from the market when the price goes against us. In this case it is necessary to understand that one can not deny the obvious facts.

If common sense tells you that it is necessary to fix the damages, then, analyzing all «a» and «against», and when he came to the conclusion that the price is more likely to continue their movement, rather than unfold, be sure to close your position. A good signal for closing the position may be a time when the price crosses the support line with an open long position, or vice versa, when the price crosses an established line of resistance at the open short position. This necessarily need to analyze all related factors, as well as consider the position with different time intervals, as mentioned above.

As again, stops, then we recall that the singularity of their application in a particular case depends on the particular shape, which is observed at the moment on the graph. If the price breaks key levels, respectively, then the entire model will be violated. Your forex strategy should aim at having to pre-determine the key levels. Stops is located below these levels. True, we should not forget that the FX market is always dynamic, hence the level of stops must be constantly reviewed.

Finally worth mentioning that in order to more profitable to close the position with the lowest risk, be sure to try to choose the currency pairs with the volatility, which is suitable for the size of your deposit. To trade on currency pairs, characterized by high volatility need a large deposit, which can withstand large deflections.

Beware of important news release. It is applicable to this case can not be the ideal rules, as the currency market in most cases, the output of important news and unexpected surprises. So ask yourself the question: «Acquitted whether this risk?» In the end, always worth remembering that only determined and carefully planned scheme of action will help you survive in the stormy ocean of emotions.