Timing in Forex_2. Timing your exits when trading Forex

Lesson 2: Timing your exits when trading Forex

Getting the timing right on trade exits is as vital as well-timed entries and in this
video, I’ll reveal some strategies to help you achieve just that. I believe strongly that
the key to successful trading is not the money you make - but the money you will
NOT lose. Bottom line? Ensure your capital stays safe!
So here’s the step-by-step guide to trade management; on this chart you see that
the entry point is on a balance of the rising trend line. I always set my initial target
based on the number of pips I am risking.

In this example, I am risking 50 pips - so my first target will be 50 pips HIGHER than
my entry price. Based on this, I set the remaining profit targets at the possible
resistance zones. In this case, I had three targets; here, here and here. And yet I
have opened 4 positions.
You may well ask, ‘Why 4 - when only three targets?’ The reason is this; as the
prices hit my first target, a quarter of the position is closed and stop is raised, which
means I break even for the rest.
And since this puts me in profit, from here-on, the trade is risk-free; I have nothing to
lose but everything to gain!
When the price hits my second target, another quarter of the position is sold and the
stop is raised at the price of my original target. As the price touches my third and
final target, I usually close another quarter of my position and place a stop on the
second target price.
Now, you might wonder - what’s to be done with the last quarter position? My advice
is to leave it open! Statistically, investors keep their losing positions open twice as
long as their winning ones. This is because traders close their winning positions to
enter new, losing ones!
Human nature prefers opting for smaller gains over riskier, potentially bigger ones.
But let’s just stop and think about this; up to now, you’ve already made a profit on

three quarters of the stock.

So, even if the price were to reverse and hit your stop now, (and remember, this is
where your second target was) you are still guaranteed to make money. So, for the
sake of a little extra risk, why not try squeezing out the maximum amount of trade
by gambling with only a quarter of your stocks?

The worst case scenario would be a reduction in profit - but overall, you will walk
away in profit. Whether you use ATR moving averages, or just raise your stop once
the price has moved with every hundred pips, you will still be in profit! If and when
the price reverses, you will have turned a good trade trade into a tremendous one!