Forex Exit Strategy: Trailing Stop

Using a trailing stop in currency tradingIt is important to have a forex exit strategy. A good exit strategy can help you limit your losses, and can help you "lock in" profits. Today, we will take a brief look at using a trailing stop in currency trading.

Trailing stop

A trailing stop is an exit strategy in which you exit the position when the market turns against you. For example, if you bought the cable at 1.7460, and it is now up to 1.8320, you might place a "sell" if the position falls to 1.8150. This means that you still have a profit, even if things start turning against you (as they undoubtedly will with cable).

Of course, if the position moves higher, you can also adjust your trailing stop accordingly. It is important to note, though, that a trailing stop is not always the best forex strategy to employ.

See Also

• Learn More About Currency Trading
  Forex trading exit strategy and more

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