Cover On Approach sounds serious, right? Maybe like a secret code or a hidden move in a video game. 

But no, this is a real term you’ll find in Forex trading. Now, if you’ve ever seen traders shouting in movies or looking at red and green charts on their computers, you’ve probably wondered what all the fuss is about. 

Why do they talk in strange words? What does cover on approach even mean? Why should you care if you’re just trying to understand Forex from scratch?

Well, if you’re new to Forex or just learning the language of trading, this is something you must know. 

What Is “Cover On Approach” in Forex?

Cover on Approach means a trader is getting ready to close a trade before it hits a certain price level, especially when that price is near support or resistance.

Let’s make that even simpler.

In Forex, traders buy and sell currency pairs, like USD/EUR or GBP/JPY. Sometimes, they “go short,” which means they are selling now and hoping the price goes lower so they can buy it back later and make a profit.

But what if the price doesn’t keep going down? What if it starts to go back up?

That’s where cover on approach comes in.

When a trader sees that the price is approaching a strong support level (a price where it usually stops falling), they may “cover” their short trade. 

This means they close it early to avoid losses. They don’t wait for the price to bounce, they close it before it gets there.

Why Do Forex Traders Use “Cover On Approach”?

Let’s think about this.

You’re on a skateboard going downhill. You know there’s a wall at the bottom. Would you wait until you hit the wall to stop, or would you slow down before you get too close?

That’s how smart Forex traders think.

They don’t wait for the price to hit support or resistance directly. They act before it gets there. They “cover on approach” to stay safe and protect their money.

This helps them:

• Lock in profit before the market changes direction.
• Avoid getting caught in price reversals.
• Manage their risk wisely.

How Can You Use “Cover On Approach” in Your Trading?

If you’re starting out in Forex, don’t worry. You can use this idea even as a beginner.

Below is how:

Watch the charts: Learn where the support and resistance levels are.

Plan your exit: If you’re in a short trade, think about closing it before it gets close to support.

Protect your money: Don’t try to squeeze every last pip. It’s better to take safe profits than chase risky ones.

Use alerts: Many trading platforms let you set alerts when the price gets near a level.

Example to Help You Understand

Let’s say you’re trading the EUR/USD pair.

You sell at 1.1000 and the chart shows strong support at 1.0950.

Now, the price drops to 1.0960.

If you’re smart, you won’t wait for it to hit 1.0950. You’ll cover on approach, maybe at 1.0962 or 1.0955, to stay safe.

That way, you get your profit and avoid risk.

Conclusion

Covering on approach is a smart move in Forex trading. It shows you’re thinking ahead. You’re not just waiting and hoping. You’re planning, watching, and acting with purpose.

Even if you’re just starting out in Forex, learning terms like this can give you an edge. The more you understand, the better your chances of becoming a confident and skilled trader.

Keep learning, and you’ll see that Forex isn’t as scary as it looks.