Forex trading position squaring strategy overview

Forex trading position squaring is no more than two ways to exit: the first is the "front exit method" that the general trading public tends to use; the second is the "back exit method" that a few successful traders tend to use. Here, we give the reader a little simple teaching about the exit. The front exit method is based on the belief that we can predict the target price at which the market trend is roughly over. Therefore, the front exit method is also called the target price exit method. This exit method is not determined by the market movement itself to tell the trader whether to close the position. Traders who use this exit method generally believe that they can seize the turning point of the market with great probability, so this exit method is similar to the way of thinking of the failed public in the market. We can only use the target price exit method in a few cases: first, if you are a compound position, you can sell part of the position at a certain target price; second, if you find an average volatility with a small standard deviation based on market statistics, you can use this volatility as the target price. In fact, in the second case, it is not possible in reality because it requires traders to be able to detect changes in the strength of market drivers, that is, before the average volatility of the market changes significantly. Discover that the factors driving the market activity level have changed.

The back exit rule focuses on following the market and letting the market tell us when the trend is over. This exit method is the same as the follow-up stop loss method, which is to wait for the market price movement to tell you that it is time to leave. The back exit method sometimes appears to be very lagging. That is, it is necessary to find a back exit method that does not appear to be so lagging.

The way to enter the market through price is the above two, that is, to book a price target to enter the market, usually according to the support resistance target, profit target, daily average volatility. Fibonacci extension level, etc. to determine, while the other method is to wait for the price to retrace to a certain range to decide the exit, such as retracement percentage, falling below the support line in the upward trend (falling below the resistance line in the downward trend), etc.

In addition to using price as a method of exit judgment, price-based technical indicators such as moving averages and other trend indicators, and even oscillators, can also be used. These methods are not as effective as the price method directly, and can also be classified as both front and back exits. Oscillators are often used in front exits, while trend indicators are often used in back exits.

In addition to price, volume is another dimension of information that the market can utilize.foreign exchange marketIt is difficult to use this indicator. Because there is no information platform that can provide real-time global transaction levels. However, volume in the stock market is a very good technical means to judge lows and highs by the volume of volume. This is a synchronous exit method. In addition, we can combine the K-line with the Fibonacci extension (or other tools for analyzing potential support and resistance levels) to identify exit points. This method is also a synchronous exit method, because this exit method is slightly slower than the front exit method, but faster than the back exit method.

For the user of a compound position. You can enter the market in batches and exit in batches, so that you can use two other entry methods and two other exit methods at the same time. Since the exit depends on the success or failure of the trade, one of the keys to the exit is to move closer to the back exit method, that is, if you use the compound position to exit, you should sell part of the position in the back exit method, that is, you must use the back exit method as one of the exit strategies. The exit is the most important trading link, and you need to spend the most energy to think about this environment.