Article Treasure Cove

If you’re going to trade using Forex Robots then you don’t have to read this article (most of it ,anyway). Otherwise, you are faced with problem of when to open your position? Once you’ve to decided whether to buy or sell, you have to decide exactly WHEN to do it. A premature open might cause your stop loss to close your position too early. Here is where technical indicators come in handy. Use a combination of them, not just one. There are many possibilities, but I’ll go for a stochastic oscillator, used together with a candlestick 1-minute chart. The stochastic oscillator should be defined to
correspond more or less with your chart. Play around with the %k factor, until it does. Once the oscillator reaches over 90, that means that the market is overbought so now is the time to sell. If goes under 10, that means that the market is oversold so now is the time to buy. But don’t open your position yet until the candlesticks, also are in your favor. (You can learn about candlesticks all over – use a search engine). When both the stochastic oscillator and the candlestick are in favor of direction you decided using the trend, that is the time to open your position.

Next Tip- Always set up your stop loss before you actually open the position. I know a fellow who didn’t, and he woke up the next morning with no money left. How large should you set the stop loss? There is one school of thought which says make a very large stop loss, assuming that the market will turn in your favor before it actually reaches that point. The only problem is that by using a large stop loss, and staying within your predetermined risk percentage, you won’t be able to make large trades and large profits. Also, what happens if the market does hit your stop loss – you’ve had it. Classically, you should set your take profit greater than your stop loss in order to wind up with a final profit. That is taking for granted a 50-50 win-loss rate. But if, for example, you see by experience, that you are having a 65-35 win-loss rate, then you can set your take profits less than your stop losses. This can cause more trades which are profitable. Once you’ve hit even on a particular trade, if you’re following the trade, set a trailing stop loss of the same size as your original stop loss. e.g. If you originally set a 30 pips stop loss, and the market has gone in your favor 35 pips, set a 35-pips trailing stop loss, and relax – you can’t lose on this trade.

Tip on when to close your position. If you’ve reached your take profit level, let the position close. Don’t let the position remain open in the hope that it will continue in your favor, because many times the profit you could have earned will be wiped out. A bird in hand…
Even if you haven’t reached your desired profit, but the trading becomes wobbly over a time, that means that the trading can go against you, so its better to quit while ahead. This is especially true when all the trends/indicators that caused you to open the trade, have changed direction. If this all sounds a bit difficult (it really can be), you can circumvent the
problems with forex autopilots. They make things easy, but if you can, keep a check on them.

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