FOREX tactics at breaks

There are three possible FOREX trader’s tactics at price breaks:

o Take the position in advance discounting the market;

o Open the position at the moment of breaking;

o Wait till the inevitable back after the break.

There are many pros and cons for each of these three approaches; sometimes a combined approach is used. While working with several lots a FOREX trader can open one position on every stage. He can take a small position before the supposed break, then he can buy one more immediately after the break and, finally, open more additional positions during the minor price drop at price correction following the break. If a trader trades small positions, his decision will be influenced first of all by two considerations:

o Which funds he could risk in this deal;

o How aggressive he will act.

The most conservative FOREX trader in such situation will open the long position on the price back. But, strange though it may seem, stand-by tactics can also be risky – while waiting for the back you can miss the moment of entering the FOREX market.