Forex – Turn Unprofitable Positions
A common tactic in currency trading is a revolution position. This action involves the closing of the transaction loss-making and the simultaneous opening of the new order, but only in the opposite direction.
It would seem that such a simple operation requires a thoughtful approach that would result from the action and the second position is not at a loss. It also should be noted that not all cases only unprofitable orders sometimes close, under certain circumstances can be closed and profitable position.
The essence of the position of the blow is that the market is constantly moving and can not be one hundred percent sure of the correctness of the chosen direction of the transaction. Fast decision making and flexibility of thinking are the basis of successful currency trading.
The most important thing to notice changes in the current situation and give false hope, which is always the cause of the loss.
The reasons for the coup.
There are several reasons why you should change the direction of an existing position:
- There has been a breakdown of the currency one of the most important levels, the direction of the fault does not correspond to the direction of an open order.
- Correction clearly delayed and largely exceeded and its standard dimensions, the price moved within the previous minimum (maximum) and continue to move against your position.
- Launch Powerful news that can change the direction of the current trend and the trend is confirmed. In order to always keep track of the basics, you should have in your trading terminal strip or bad news.
- There is a correction to the realization of a longer time frame. For example, it has opened a short operation of the M15, while the M30 there is an upward trend, and the depreciation of the M30 is just a correction. The deal is closed, although his position remains profitable, otherwise, you will lose and won.
When not spend a coup.
- At the end of the current day, in the last hours of difficult labor market choose the right direction of the operation, as the market is not behaving quite predictable.
- The market went into a state of freight and the price moves in a narrow corridor almost did not change. In this case, it is recommended to reduce the size of stop loss, who had worked as soon as a fault in the opposite direction to the order of address occurs.
- Soon release a new message for traded instruments that can significantly affect the trend.
- The address of the new position does not correspond to the daily trend, and cannot be another move backward.
The main error in the application of the tactics of the revolution is that for a trader trend correction confuses investment, the opening of deliberately losing trade, and closing a potentially lucrative. Therefore, before taking any action, please ensure that the situation in the first long time frames.