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How to Exit your Forex Trading Transactions at the Best Price Levels

Article Summary: When to exit a Forex transaction has always been a big forex trading challenge. This is not a problem for traders that trade the no stop, hedged, forex trading grid system as they set predetermined exit levels for each and every trade and these levels are always used.

In previous articles in this series on no stop, hedged Forex trading we covered "Forex trading without stops" and "Forex trading not caring which way the price moves". Below we are going to cover what we regard as the most difficult aspect of Forex trading: - When to exit a Forex trade.

How often have you exited a Forex trade positively and then looked on as the price travelled another 100 pips in the same direction? How often have you watched as the price retraced all the way back to your entry or even beyond after you tried to squeeze the last 5 pips out of a good Forex deal? We have found this area of knowing when to exit a forex trade, one of the most frustration parts of trading.

When you enter a Forex trade all the trading signals are aligned and you can tick all entry criteria on your checklist. That is why the entry is the easy part. You are entering on your terms. When the price takes off in its intended direction it enters a mystery zone where you are dependent of the volatility of the move for the Forex transaction to succeed. You very seldom have reference points. Every trader is unsure of when to cash in Forex transactions. The fact that the price likes revisiting previous support or resistance makes this even more challenging.

It gets worse on Forex trading deals that go negative. You are 30 pips down. Do you close the deal at a loss or do you wait for a small retracement to reduce your loss? Surely the price has gone as far as it can go?

It can't go more negative? Then the transaction goes even more negative. You start thinking: "I've lost so much another 20 pips can't hurt I'll give it more room". And so on. Many Forex traders can identify with this.

With Grid trading you don't have that problem. You would divide the expected trading range for a particular currency for the next say 6 months (say 4000 pips) into grid levels with gaps of say 200 pips. The guesswork of when to cash in your Forex deals has been eliminated. You cash in your positive deals every time the price touches a grid level. It is as simple as that. As soon as the total of the deals you started with is positive, you close all your deals positively and start again. How simple can trading be? No ifs, buts or maybe's. That is why you don't need charts. You trade price levels, with no stops (Because each price level has a buy and sell active) and you don't care about which direction the price moves.

The question of when to enter a Forex trading transaction is also answerred. You would use exactly the same price levels that you use to exit profitable deals (as determined above) to enter new deals when using your no stop, hedged, Forex trading grid system strategy. The process of determining the price levels is very important as some trading groups are reporting gains of one thousand percent a year on capital employed using this Forex trading technique.

This is only one example of a way of finding a grid structure. Future article on grid levels will give other examples of ways grid levels can be determined. For more information (which is freely available) on this great trading system why not search the web for "no stop Forex trading".

This is the third in a series of seven articles on the no stop, hedged, Forex trading technique which will be presented in this article directory on an ongoing basis. Make sure that you do not miss any of them.


Copyright (c) 2008 Forex Trading Alerts

Article Source: http://www.upublish.info

About the Author:
David Lloyd
Learn how you can make money from Forex Trading by tapping David Lloyd's experience by visiting Grid trading systems or contacting him at David Lloyd David and Mary McArthur have written a number of articles on the no stop, hedged, forex trading grid system.