When to Exit a Trade

[MegaWham]

I think this is one of the most important parts of trading - When should you exit a trade?

I think this separates the winning traders from the losing traders and I think this is the TRUE edge.

Let's take the famous story of the two traders who entered a trade at the same time. One trader came out with a profit and one trader came out with a loss. What was the difference between these two traders? The difference was their exit strategy.

Quite often, exit for most traders is dictated by emotional pressures of the trade. Sometimes I've experienced this - I've been looking at the trade so much it has sapped all of my mental, physical and emotional energy away from me, and then I just want to get out to give myself a break. Obviously, in that situation I'm not going to get out at the best point am I? Of course not! So that brings me to my main point number one on when to exit - and that is 'You have to have a clear head to exit in a consistently profitable manor.'

A Clear Head is IMPORTANT!

Don't bother trading seriously unless you have got your emotions in check. When you do start to trade I can't stress this enough, trade small amounts and become confident with REAL money before considering the Forex as a methodology of making real money. If you go into this game with the hope of making lots of money, without having any experience, I can assure you my friend, you'll get annihilated because of your emotions and poor judgement under extreme pressure.

That is my point one on how to exit properly.

Point 2 will be coming soon. Please feel free to add something yourself =) =D

[bestforexpartner]

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[mangboy]

thanks for such an eye opener, I hope people realize that most of the time its not a bad trade but a bad exit strategy what i usually do to avoid that mental maze when overthinking things during a trade is set my exit or tp short then be contented with the gain, even if the trade continues to my favor. I mean, a wion is a win let it be big or small, and its hell lot better than loosing

BTW, Im new here and i hope to trade exp with every one. couldnt find the intro section

[theMoney]

thanks for such an eye opener, I hope people realize that most of the time its not a bad trade but a bad exit strategy what i usually do to avoid that mental maze when overthinking things during a trade is set my exit or tp short then be contented with the gain, even if the trade continues to my favor. I mean, a wion is a win let it be big or small, and its hell lot better than loosing

BTW, Im new here and i hope to trade exp with every one. couldnt find the intro section

My friend, welcome to the community! I think you're a man of wisdom.

Most people think the entry level is the most important part of the trade, but I can tell you from my great experience that it's the exit that is by far the most important. It's the exit which is the psychological and emotional part. We face problems such as these:

You don't want to take a loss and you want to grab profits.
WHERE on earth do you place the stop / take profit?
Should I give it room to move or cut it off short?
Should I let this run or place a stop just above my break even?

(And by this point, most people are pulling their hair out, crying to the trading God's. Heeeeeeeeeeeelpppppp!).

I think becoming good at exits is a bit of an art and a bit of a science. You get better at it the more you trade. Like with anything, practice makes perfect.

I heard a quote years ago saying, 'You can't go broke taking profits', but I tend to disagree with that IF you don't cut off your losses.

For example, you could cut your winners short at about 20 pips and have 10 wins in a row, and then on your 11th trade you could lose 300 pips, which results in a net 100 pip loss.

How do you decide to exit your positions?

[Dominator4fx]

thanks for such an eye opener, I hope people realize that most of the time its not a bad trade but a bad exit strategy what i usually do to avoid that mental maze when overthinking things during a trade is set my exit or tp short then be contented with the gain, even if the trade continues to my favor. I mean, a wion is a win let it be big or small, and its hell lot better than loosing

BTW, Im new here and i hope to trade exp with every one. couldnt find the intro section

Yes my friend. Here you will find some really nice traders who will help you with any of the problems that you may be facing.

And this is the main advantage of the forums which you must make use of.

[HannaLors]

I exit based on major supports or resistances. I also class psychological round numbers as those levels.

I sometimes exit based on an equity % loss, where I admit a trade is wrong and cut it off at a given %.

[Dominator4fx]

I exit based on major supports or resistances. I also class psychological round numbers as those levels.

I sometimes exit based on an equity % loss, where I admit a trade is wrong and cut it off at a given %.

It is always better to know that we have Entered into a wrong trade and book an early loss rather than having to wait for the Stop loss to cut the trade off.