When Do You Know A Forex Trade Set Up No Longer Applies?

[bill colton]

Whilst finding a trade set up is a key part of trading, knowing when your initial idea no longer applies can be vital.

You may find a good support area to go long however if there is a strong break below you could be looking at a complete change in market structure. Alternatively you may find there is a break of resistance due to higher buying pressure.

This could be something you decide to put in place before entering the trade, or something that you decide once the market is moving against you.

Having a clear exit will help to keep any emotions out of play and stop you turning a minor mistake into a large loss.

How do you usually decide where your invalidation level will be? Do you use market structure, close on candles or a mixture?