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.

Everything is much more complicated here, since the hands themselves simply reach out to close the warrant and take existing couple of points. But the main thing is not to succumb to the first impulse and act not on emotions, but on the basis of analytical data.

And so about the options for closing the profitable positions on Forex:

1. We come from the opposite - the warrant is closed as soon as the signal is received to open the position in the opposite direction. The source of such a signal may be the forex indicator, message from the signal supplier, or your own conclusion about the dynamics of market movement.

2. A sharp movement - as soon as you notice that the market has revived, try to close a profitable deal. True, you can take a chance and take a couple more points if the price moves in the right direction, but as soon as it began to turn around right away, close the transaction, or pre -set the safety stop.

3. By time - if you determined before the start of trade that the average fluctuation in the price at your time frame lasts about an hour, and after the correction begins, this will be the basis for leaving the market. You can also navigate at the end of the working day or week, but make the exit in advance about 2 hours before a specific moment.

4. Based on the volatility of the market and the amplitude of movement - usually this option is used in trading in price channels. As soon as the price approaches the turning point, the position closes.

If you exclude emotions, and the trading will be carried out, only based on the data obtained, this will immediately increase the profitability of transactions, and with it the general financial result.