Strategy Video: Overlooked Market Mechanics on Trade Entries and Exits
• Entering and exiting trades is often considered a formality of a more comprehensive strategy or 'edge'
• The mechanics or execution of a trade, however matter a lot in each setup's or a strategy's performance
• We discussion conviction, time, triggers, entry versus market orders and more as vital trade factors
Want to develop a more in-depth knowledge on the market and strategies? Check out the DailyFX Trading Guides we have produced on a range of topics.
How much time do we afford to the particulars of executing a trade? Most of our time and mental effort is spent on developing a strategy to highlight good trade/investment opportunities. While evaluating the market effectively for scenarios and setups is critical to performance over time, we should not relegate our rules and methods for putting on a position or taking it off to a boilerplate - or worse, unplanned - approach. Our level of conviction sets our expectations for return and time frame, triggers can be selected for influence, momentum and trade duration can represent better milestones for an exit than just a specific level. Even the trade off between entry (limit) versus market orders should be considered according to given conditions and our intentions. We discuss the mechanics of entering and exiting a trade against EURUSD and AUDUSD moves in today's Strategy Video.
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DailyFX provides forex news and technical analysis on the trends that influence the global currency markets.