Learning How to Exit Forex Trades Properly

For newer currency traders, the main focus should be entry points. The exit should be determined by your risk to reward. For example, if we are risking 100 pips on the trade, we should look to take profits when we are up 200 pips in the trade. That is the basic rule. I might suggest increasing that to 300 pips and a 1:3 risk to reward ratio.


Now, of course, we might hold for a longer period of time in some situations. But that is a little more advanced. Learning to exit is the most difficult aspect of currency trading. Even extremely successful forex traders struggle with exits from time to time. We should learn how to enter and place our stop first. This should be very mechanical. Exits are more of an art form.


The key point is that we should strive to acquire an exit problem. What to do with all these profitable trades? You might spend the rest of your trading career dealing with that issue. My point is that it is a good problem to have. But many traders do not get to that point because they have not mastered the entry, which in relative terms, is a lot easier to master.