What are forex positions?
Forex positions are net total holdings of a currency. Just like the common meaning of position, a forex position is the place where you are exactly. So, when you are having terrible forex positions, it is time to let go or wait it out depending on your sense of trading adventure.
The different types of forex positions
To better know when you should exit a position, it is best to be familiar with the different forex positions first. Here are the types of forex positions:
• Short position: more currency sold than bought
• Long position: more currency bought than sold
• Flat or square position: no market exposure
• Open position: trader has bought or sold but has not closed the position yet by selling or buying back
You could say that forex positions mark your chosen strategy. If you maintain forex positions for a long time, you are more likely content with your trading results.
Forex positions and exit strategies
When do you exit forex positions effectively? There are many strategies that can be done to exit forex positions. You have to pick one that's best for you. An initial stop is ideal to save you from further losses. This gets you out of forex positions that may get you in trouble if you linger. However, some may say that getting out too early from forex positions can also prevent you from earning as much as you can. If you want to make sure you get the profit that you are hoping for, you could perform a take profit stop where you exit when you have achieved a particular number of pips you are aiming for. Exit strategies, as you can see, are strongly dependent on forex positions.
