Closing orders when trading Forex

Many novice traders are mistaken in thinking that the main point of Forex trading is only the search for entry points into the market; it is equally important to hold an already open position and close all open orders on time.

Closing orders sometimes plays a decisive role, since timely exit from the market allows you to get maximum profit and avoid losses.

It is precisely obtaining the maximum profit from one position that is the main indicator of effective trading, since often the number of unprofitable positions is greater than the number of profitable ones and it is necessary to cover the amount of total losses.

There are several options with which you can complete the transaction, the choice of the most suitable one depends on the strategy you used.

We will be talking specifically about profitable options, so we will not touch upon the description of how stop loss works; in this case, the order is closed at a loss, with the exception of some options when this stop order is manually transferred to the break-even zone.

1. Take profit is one of the most used, but far from the most profitable ways to close a Forex order. The value of this order is set immediately when a new order is opened. Technically, this moment usually does not cause difficulties, but not every trader can correctly calculate its value.

The main thing when calculating the size of a take profit is to find the optimal value at which we will receive the maximum profit and will not be exposed to risk. After all, if you set an excessively large value, the price may simply not reach the trigger point and make a reversal.

Therefore, we calculate the take profit size based on the dynamics of the trend movement; if the price reached a certain level several times during the trading time frame, then it is taken as a basis. The order value is set slightly less than this level.

Another option is to use trend forecasting for the near future. If you are sure that the price will definitely move at least 50 points in the chosen direction, then set the same value for take profit.

2. Trailing stop is a rarely used, but the most profitable option for closing orders; when used, it becomes possible to take the maximum number of points from one price movement. Essentially, this is a floating stop loss that follows the price and is triggered only when the trend reverses.

The only condition for its use is trading on medium- and long-term time frames, since it is technically impossible to set a trailing stop closer than 15 points to the current price.

That is, this order will constantly follow the price if it moves in the right direction, in the same case, if there is a trend reversal and the movement is more than 15 points against the open position, the order is triggered and closes the position.

For example, you opened a trade and set a trailing stop at 20 points, the profit was 30 points, which means the trailing stop will be transferred and will fix 10 points out of the 30 received, and so on. Profit 50 points, guaranteed to take 30.

If desired, the order can be closed before the stop order is triggered.

3. Manually closing orders - it would seem that it would be easier, if you made a profit, you closed the deal, but the question of how much profit you can get from one deal and when exactly to close an open position always remains one of the main ones.

You must immediately decide on the level of profit and loss upon reaching which you will definitely close all orders. But it would be even more correct to close market orders. That is, when the position finally ceases to be profitable.