This article looks at the exit forex strategies that you can use when you trade.

There are a lot of traders who focus on the entry strategies that they have for their forex strategies.  These traders often neglect to look at the exit strategies that their forex strategies need to have.  Having a good exit strategy will ensure that you are profitable on the forex market.  There are two common exit strategies that are used and you should consider which ones you want to employ in your forex strategies.

The Two Exit Forex Strategies

There are two ways that you can exit the forex market and they are with a profit and with a loss.  The different ways will have different exit strategies that you have to consider.  The first exit strategy is to use a stop loss order and the second is to use a take profit order.

The Use of Stop Loss Orders

The stop loss order is the one exit strategy that most traders will know about.  When you use a stop loss order you are not only exiting the market, but you are also limiting the impact of your losses on your trading account.  There are a number of different stop loss orders that you can use when you trade.

The most commonly used stop loss order is the hard stop.  When you employ this stop with an exit strategy then you are going to have a set price where you exit the market.  This price is generally determined by the risk management plan that you have and the amount you are willing to lose per trade.

Another stop loss order that you can use is the trailing stop.  This stop order will help you keep some of the profits that you make if your trade turns after making a profit.  When used in an exit strategy most traders will set the stop loss order a set number of pips from the trade price.  There are also some traders who use the risk management plan to determine where to place the stop loss.

The last stop loss order that you should consider is the day order.  This stop loss is not as commonly used as the other types of stop loss orders.  When you use this order you are going to have a stop order that expires after one trading day.  This is not often used because of the limitations that you find with the timed exit.

The Use of a Take Profit Order

The take profit order allows you to exit the market when you have made a profit.  There are some traders who do not like this order because they feel it limits the profits that you can make.  While this is true to a certain extent the take profit order will also protect you from having a winning trade turn into a losing trade.

Where you set the take profit order will vary depending on the way you are trading.  You will have to look at the analysis that you complete and determine where your exit point should be.  This is generally the point where traders place their take profit order.  There are some traders who place the take profit order at a set number of pips from the entry.