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The Problem With Manual Exits

Forex Strategy Highlight: The Trouble with Manual Exits

Do you drive without a seat belt?

Then you’ll enjoy manual exits when forex trading.

However, be aware that the potential that you are about to get your financial cranium cracked is definitely present for those who determine to exit currency positions manually rather than setting a stop-loss order that automatically triggers.

Manual exits in the currency markets are not always stupid, but if you're not careful, adopting this trading style can put you out of business in a hurry.

Manual Exit Problem #1: Emotional Involvement

So, you’re into a position. You like your position a lot, too. Really strong. So promising is your new and exciting position that you do not want to set a stop-loss up right now, for fear of having that stop-loss triggered—then you’d be out of your position.

In other words, problem #1 with manual exits from currency trades is that this style of closing out allows your emotions to leak into the currency trading process. Emotional decision-making is a no-no in currency trading and you know that.

But your position is so new, so exciting…you’ll set a stop loss later.

By the time later comes around, you’ve lost your rear end.

Manual Exit Problem #2: Lifestyle Degradation

Anyone who’s ever been married and traded currencies at the same time knows that the forex markets are hungry and big enough to eat your soul. Or, if you’re a bit more careful, degrade your lifestyle to the point that you officially have no life.

Because you are on the computer all day, and sometimes, all night.

You begin to dress poorly. You see charts in your head. You like whiskey because it helps you sleep and sometimes it even helps you trade currencies better.

Those of us who haven’t been there personally know someone who has, and we’re all fairly certain that your wife or husband does not like that person as much as the person you are when you’re not obsessed by forex trading.

Neither does anyone else like “Forex You,” really, except maybe a few of your forex buddies, who are also having marriage issues.

Relying on manual exits has a way of exponentially enlarging your time spent staring at a computer and waiting for a number to change to another number. That brand of staring, in turn, has a way of distracting you from other stuff you should be doing with your life.

Manual exits can degrade your lifestyle.

Manual Exits Problem #3: Profit Shrink

“Cut your losses, but let your winners run.” But how many of us actually do let our winners run as much as they want to, when we’re making forex moves manually?

The temptation to close out a winning position is great, young grasshopper, when you see that P&L looking so fat and ripe, then suddenly ticking down, scaring you.

Scaring you, many times, into exiting your winning position—a position that would have won for you much longer and stronger, if only you had let it run! Premature manual exits of winning trades is like unto premature ejaculation among high school boys:

It happens suddenly and uncontrollably, but that doesn’t make it cool.

Important Forex Information

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