Three Strategies for Closing Positions in Forex Trading
Many traders have a cashbackforexecific cashback forex for open 100%cashbackforexg their positions, but few have a clear and specific strategy for closing their positions Although most prudent traders set stop- cashbackforexpipes and take-profits in their trading, few consider how to close their positions as much as how to open them. Ho forexcashbackeasyver, in fact, our closing strategy should be as clear as our opening strategy, with clear settings, and should be specific to the circumstances in which the position should be closed If there forex cashback easy no prudent closing strategy, traders actually invariably take more risk This article will introduce three simple but effective closing strategies Closing strategy one: traditional stop loss/stop gain (using the price trend in the support and resistance) The main point of this method is that the risk-reward ratio should be taken into account when setting a stop loss as well as a stop gain When we are short a currency, we need to observe the previous price trend and look for a stage high as a stop-loss level, because the stage high is likely to be a risk in the future. In this way, we will not get out of the market unless the exchange rate is strong enough to make a new high. The commendable thing about this approach is that if the exchange rate is strong enough to make a new high, it makes no sense to be short on the pair. If our stop loss is set at 100 basis points, in order to achieve a 1:2 risk-reward ratio, our profit target should be set at 200 basis points to close the position Strategy 2: Using Moving Averages (MA) Trailing Stops Traders often use moving averages to analyze the current market trend. The core of this strategy is that if the price moves from one side of the SMA to the other, then the market trend may have shifted and the trend trader should close his position in this case. Traders can set their stop loss below the SMA. If the stop loss is 80 basis points, in order to achieve a risk-reward ratio of 1:2, we need to set the stop loss at 160 basis points. In this case, if after opening the position, the 100 SMA of the currency pair goes up by 30 basis points, then we also adjust the stop loss up by 30 basis points, which means that we reduce our risk by 40%, but the stop loss remains unchanged. ATR (Average True Volatility Indicator) The value of the ATR indicator indicates the size of the market volatility By looking at the average volatility over the past 14 days, we can see that the current market volatility is large or small, and thus set our stop loss/stop gain If the ATR value is large, the corresponding stop loss will need to be enlarged (Forex Academy www. waihuibang.com/fxschool/) because in a highly volatile market, a narrow stop loss can easily give the market noise to hit through the same, if the ATR value is very small, then we also do not need to set too large a stop loss, because then we will take unnecessary risks using the ATR set stop loss method is applicable to any time frame need to keep in mind is that the use of the A good start is only part of success, and similarly, a good opening is only part of a successful trade. Traders need to have a complete strategy for their trading at all times.