When to close positions in Forex.

There are a lot of methods based on which positions are closed on Forex, but as a rule, this action is based on two reasons - achieving the required level of profitability and exceeding the limit losses.

As a result, closing positions on Forex occurs as a result of triggering stop orders (take profit, stop loss, trailing stop), or manually at the trader’s decision.

It has been said more than once about how to close unprofitable positions, so we will only dwell briefly on this point, clarifying the main points.

Closing unprofitable positions.

The most acceptable option, from the point of view of risk management in Forex , is that the loss as a result of one unsuccessful transaction should not exceed 2-3%, but this option is suitable for fairly large deposits and when using a small leverage.

After all, judge for yourself if you have only $1,000 in deposit and you use a leverage of 1:100, then even when trading with a volume of 0.5 lots, you will have to close the position if the price moves only 4-6 points against you.

Which is not much more than the minimum spread. For this reason, I try to slightly increase the amount of acceptable losses, within 5-8%, trade with a larger deposit and open transactions of a smaller volume. At the same time, do not forget to take into account the movement of the trend itself.

Closing profitable positions.

Here everything is much more complicated, since the hands themselves simply reach out to close the order and take the already existing couple of points.

But the main thing is not to give in to the first impulse and act not on emotions, but on the basis of analytical data. And so about the options for closing profitable positions on Forex:

1. We start from the opposite - the order is closed as soon as a signal is received to open a position in the opposite direction.

The source of such a signal can be a Forex indicator, a message from a signal provider, or your own conclusion about the dynamics of market movement. 2. Sharp movement - as soon as you notice that the market has revived, try to close a profitable trade.

True, you can take a risk and take a couple more points if the price moves in the desired direction, but as soon as it starts to reverse, immediately close the deal, or better yet, set a safety stop in advance. 3. By time - if before starting trading you determined that the average price fluctuation on your time frame lasts about an hour, and then a correction begins, this will be the basis for exiting the market.

You can also focus on the end of the working day or week, but make an exit in advance about 2 hours before a specific moment. 4. Based on market volatility and amplitude of movement - this option is usually used when trading in price channels.

As soon as the price approaches the turning point, the position is closed. If you exclude emotions, and trading is carried out only based on the data received, this will immediately increase the profitability of transactions, and with it the overall financial result.