FOREX: Exiting positions at a right time

The presented article covers one of the most important (in author's opinion) aspects of trading in general and Forex trading in particular - managing of orders and positions. This includes choosing entry points, making decisions about exit points, stop-loss and take-profit of the trader.

I hope this article will help new traders, who just began to work with Forex, and also to experienced traders who trade regularly and regularly make or loose their money to the market.


When I started to trade Forex and made my first big losses and profits I began to notice when very important thing about the whole trading process.

While the right time to enter a position was rarely a problem for myself (nearly 80% of all my open positions had gone into the "green" profit zone), the problem was hidden in the determining the right exit point for that position.

Forex Trading System

You can also use other Forex trading systems to give you an outline of what parts a system has to have for it to make money.

All great Forex trading systems have these three basics:

1. Entry Rules,
2. Money Management Rules and
3. Exit Rules.

Study and learn from the Forex trading systems out there, borrow their concepts, and steal their ideas. It will put you on the track to the system that will make you a successful trader.

Forex Market Participants

In the last years, the Foreign Exchange Market has expanded from one where banks would execute transactions between themselves to one in which many other kinds of financial institutions like forex brokers and market-makers participate including non-financial corporations, investment firms, pension funds and hedge funds.


Its' focus has broadened from servicing importers and exporters to handling the vast amounts of overseas investment and other capital flows that currently take place.

Lately foreign exchange day trading has become increasingly popular and various firms offer trading facilities to the small investor. Foreign exchange is an 'over the counter' (OTC) market, that means that there is no central exchange and clearing house where orders are matched.

Geographic trading 'centers' exist around the world however and are: (in order of importance) London, New York, Tokyo, Singapore, Frankfurt, Geneva & Zurich, Paris and Hong Kong.

Essentially foreign exchange deals are made between participants on the basis of trust and reputation to deliver on an agreement. In the case of banks trading with one another, they do so solely on that basis.

In the retail market, customers demand a written legally accepted contract between themselves and their broker in exchange of a deposit of funds on which basis the customer may trade

Some market participants may be involved in the 'goods' market, conducting international transactions for the purchase or sale of merchandise.

Some may be engaged in 'direct investment' in plant and equipment, or may be in the 'money market,' trading short-term debt instruments internationally. The various investors, hedgers, and speculators may be focused on any time period, from a few minutes to several years.