Forex Currency Trading

Currency Exchange – Forex Mamma

To Exit or Not to Exit a Position Early

One of the biggest problems that a lot of Forex traders have concerns exiting a position early. What does exiting a position early mean? Let’s say that you have invested in a specific currency pair, set your pip stop loss and your pip target and walked away. Several hours later or the next day you check to see how your investment is doing and you see that it’s going up quite a bit. It hasn’t reached your pip target yet but you get nervous and close the position early to hold on to your profits and avoid a loss.

In some cases when you close a position early you’ll find that the value of your currency pair drops after you close out so you made the good move. After all, if you had not exited early then you would have ended up losing part of your investment and instead you came out of things with a profit. However, in other cases you may close a position early and then watch as it continues to go up and hits or even surpasses your original pip target. This can be a huge disappointment as you missed out on a lot of profit.

A lot of traders exit early due to fear and quite frequently it results in disappointment. You can’t control your fears and therefore it can be tough to avoid early exits. However, if you are able to stay in your positions until the end you will find the results much more rewarding.