Whenever you get into any business, you need to have a plan in place regarding when to get into a given market and have identified what circumstances will determine your exit.
In FOREX trading, the goal of course is to buy low and sell high, or Sell high and buy low, however one thing is certain you are not going to be able to do this all of the time however. While being involved in any given FOREX trade, you need to determine your entry point, your stop loss point, and your take profit point. While it is general practice to set these levels initially, circumstances may arise that are cause for re-evaluation of these set points; the reason for you to enter the trade may have been invalidated if, for example an expected news announcement does not materialize you may assume that the market is creating a type of candlestick formation (ex. double top- in which a good place to place your stop loss is just above the double top formation), and this may in fact not form.
In these cases, you may choose to manually get out.
You also need to be aware that it can often happen that the “big players” will often presume to know where other traders have set their stop loss levels and force the market to just reach those levels and stop people out at a point prior to the market turning around. In these instances, your analysis was correct, but you were stopped out prematurely, (at a loss).
The means to prevent being stopped out prematurely are to have a “mental” stop loss level, a hard stop level, or a timed stop loss level. A mental stop loss level is the level at whick you intend to get out of a trade but do not in fact place this with the broker. A hard/protective stop loss level is the level at which, if you are absolutely wrong about your analysis, it will get you out of the trade. A timed stop loss indicates the time at which you will get out of a trade, whether it be at a profit or loss.
To summarize, the basic trade management style involves: entry, stop loss, take profit levels. The comprehensive approach covers: entry, mental (protective) stop loss, take profit levels, or timed exit, (profit or loss).