Best Exit Strategies for Forex market?

Hey all
I had a hunt around but its pretty thin on the ground out there regarding what is the best Exit strategy for a trade (let alone Forex specific)
so c’mon lets get to business and decide / Debate the area that is actually more important than the billions of threads on Entry points…any idiot can enter a trade …but when to leave the party ?
Ma’s ?
Targets ?
Price action Support / Resistence levels
Trailing Stop losses ?
any other indicators ? (eg SAR ?)
News releases ?
whats your favourite and why ?..or do you combine multiples ?

When to leave the trading or party is also a big question for me. I combine multiples specially News releases and Trailing Stop losses.

I agree trailing stops are the best way of exiting the market and guarantee that you lock in a profit. The real question is big should you set the trail on the stop.

Personally, I tend to set a TP for my trades when I first place the trade, a point at which the trade would close automatically. This is generally at a sensible Support or Resistance level, which might be an EMA, a zone on the chart, but basically an area with a PA reason to think things might turn around.

Once I am in the trade, I usually then trail my Stop once things are underway, so if there is a Reversal before Price hits my TP I am out with some profit, or at BE, whatever. My original TP is usually sensible but moderately ambitious, so if Price flies I’ll get there but not always. I will only take a trade with sufficient room to move that even an interim close pays a decent return.


I trail manually, I don’t like automating a trailing Stop. Partly because I trade a number of Pairs, and each behaves differently, and partly because my trades are all different sizes. Market conditions also change around a lot, so sometimes it pays to be more conservative, other times the market rewards being bold. So I look at the PA for each trade and decide on trailing based on that. A Stop without protection is just too random for me, it has to make sense to me in context and I can’t automate that sort of analysis.


Set your stop loss beyond the closest support or resistance and place your limit within the closest support or resistance. That would be a manual approach.

If you were looking for systematic exits or automated exits, I really like using the donchian channel (price channel) as a stop loss. So, if I were long, my trade would close if the candle closed below the lower donchian. If I were short, my trade would close if the candle closed above the upper donchian. Limits should be set to be a larger amount than the original distance between the entry price and the donchian line used as a stop.

I agree to a point, that is one approach to manual closing. However, it is important to distinguish between S&R levels depending on the trading style. If I am looking for a swing trade that I want to hold for a little while, then I might want my TP to be beyond the nearest S/R level; indeed, there might be a number of levels between my Entry and TP. These might be areas where I expect some retracement, but depending on the strength of the underlying move they can be opportunities to add to rather than close my position. So for a small, intraday position the nearest S/R level can make sense, but it is not always the best option for all approaches, imho.

Simon I am sure I have said it before but those are wise words from a wise man! Very well put

I’ve been using a trading approach for just over two years now, one that I have developed from the ground up, and so know it like the back of my hand. That is not to say that there are not some ‘grey’ areas with some of the elements involved, because there are. In short, I took three years of data, from five currency pairs, and fitted a strategy around the intra-day data. ‘Curve-Fitting’ as its more commonly known is not a route I would advise to any new trader, as you need to analyse vast amounts of data to reassure yourself that you are not simply trading off the back of luck. All variables need to be quantified in a mathematical sense so that these exact variables can be spotted time and time again when they repeat.

Because of this approach, and getting back to the original question, I use a hard profit value, in terms of pips, for every trade in different pairs. This can be used with a high degree of confidence as the historical workings can support this. Looking over a few months of data and fitting what did work then onto the markets of now is not a great idea, the sample size is simply not large enough.

However, one area do I do look at is the ATR (Average True Range) on a Daily Time Frame. This indicator tells you the absolute movment in pips from the extreme high to extreme low in each trading day. From this rather simple figure you can calculate an average, and so can fit your TP target zone within what is ‘usually’ the typical daily range. One would be stupid to set a TP of 150 pips when the ATR reading for the past 20 days has averaged to anything less than 150 pips…unless of course you are holding trades for more than one day, in which case you just multiply out the ATR reading, or take a larger average.

Personally I have never used trailing stops, but then again I have never really researched the advantages of using such a risk management tool. Because I have a vast collection of data, tests can then be implemented on this data in programs such as Microsoft Excel. No need for some fancy maths program when you simply just want to find the optimal results that can fit you sample data. Once you have these optimal results, otherwise known as the ‘Profit maximising ratios’ you can implement these into your trading. One of these optimal results is the TP level for different pairs, and that’s how I personally choose when to exit my trades.

I agree. Good points.

For example, if I am trading a trending pair, it’s common for me to place my target beyond where the price has been in recent history. So it definitely depends on the situation!

Bob, I appreciate that a great deal, very kind of you to say so.

One thing I love about currency trading is that there are so many ways to skin this particular cat. Your background analysis sounds quite different from mine - had you been explaining it in person I fear I would have had to deploy the ‘nod sagely and hope that there is not a quiz at the end’ approach - but the key point is that we are arriving at a set of rules that we know work within our strategy and we are following them mechanically and consistently. And therein lies the route to trading success, imho.

And I completely agree with the bit of your post that I have requoted, above - this boils down to the same thing as my ‘make sure that there is room on the chart for one’s intended trade’ point, and is a point too-often overlooked by newer traders.

Good stuff.

Indeed - fluid and flexible within pretty rigid rules wins the day!

There’s a lot of love on this thread, man. If we’re not careful we’ll need a ‘group hug’ emoticon.

I personally trade alot like simon and I am not going to say there is any wrong with the way you exit. Works fine if your goal is to try to catch the daily range. then ATR might be your best bet. But like stated if you are a swing trader from higher timframes ATR is not a good idea. Also What if ATR tells you hold for like you said 150 pips but there is a major S/R level in between price and your ATR. But then thats also why there are always a grey area in trading. S/R levels that I use only work if price respects those levels. Sometimes they do sometimes they dont. Thats why I generally do not set a TP like simon says he does unless I am going to be away and cant monitor my trade. I usually just tighten up the stop once price reaches my area of TP.

Either way I dont think there is a wrong answer here as long as you have a reasonable expectation of where the market will go. there is no wrong way to go about it (well I am sure there is but thats a discussion for another time)

I found this to be an interesting read:

It talks about most of the points made here already but includes a couple more.

Let me direct you to the Newbie Section, this way please >>>>>>>>

:35: :18: Nicely done.

Haha so much for the group hug…

LMAO Tell them to hold a seat I will be there shortly. What I was meaning was more it depends on how you trade. How people decide to collect profits are really up to the trader and his system. Swing traders look for longer term than a day. A day trader could go your route or use S/R levels. A scalper I am not to sure of never been into scalping. Either way the most important part is cutting risk. Once risk is off the table then how you collect profits is really not to important. Of course let your winners run but you also got to understand you let them run to long and they will run out on you. I have seen it many times so I can assure you it can happen.

Well enough with the chit chat its back to the newbie section I go with my tail between my legs

For day trading, stoploss should be 50% to 100% of the ATR. If you are having trade that is profiting, do trailing stoplost adjustment accordingly every 25 or 50 pips interval.