An Excellent Way To Determine The Exit Point
Most of beginner and sometimes advanced traders spend their time analyzing their entry point to the market and ignore or neglect a very important thing which is the “Exit Point”. Sometimes fear and greed play a negative role in the decision of the exit point. For this reason it’s crucial to determine it before entering the market. Whether you are using economic reports numbers to enter the market or applying a purely technical system, the method I’m going to elaborate is applicable. I have seen people manipulating a very complicated mathematical calculation to define the entry level and others applying a very straight forward entry method based on numbers in the economic reports and don’t pay any attention when they are going to exit the market! Whatever is your method of trading, you have to pay attention on your exit point because it’s the most important part of the game! Keep in mind that your goal is to consistently bringing home money right? Personally I use both economic and technical analysis to enter the market. As I have strict rules and consistency while analyzing the way I’m getting in I do have the same consistency and rule when getting out. I’m not going to elaborate the analysis of the entry point in this article; I will talk about later but now let’s focus only of the exit strategy. Watching the market is like watching “Formula I”, cars sometimes pull over at pit stops to make some technical maintenance. In trading it’s the same, market sometimes at a given point or interval pulls over to relax after a long trend. Logically speaking, the reason why the market rebounds at these levels, it’s because most of traders close their positions and take their profit so why don’t you do the same? For this reason I call this point “Rest Point”. Your mission now is to define those intervals of prices or points by examining the chart of the previous periods and determine where the pit stops are. Once you have those intervals or points it will be easy for you to stay away from them! You have either to close your positions before the market reach this interval or don’t enter the market until the interval will be totally broken. Sometimes these points are near what we call “virtual supports” or “virtual resistances”. We call them that way because they are not real support and resistance but rounded values of the prices (e.g. 1.2000 – 8.9000) where almost all traders prefer to close their positions at this level and run away. For more free information and advises on how to trade, visit www.myexpertadviser.com Denis Badger has over than four years of experience in forex trading. Now he would like to share his experience with you in order to help you building up your own successful trading system. Visit www.myexpertadviser.com for more information and free advises on how to trade. |
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