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Forex Trading Safety – How To Use Take Profit and Stop Loss?

The FXCM Markets Metatrader 4 has always been described as random. Even though you may have carried out a thorough technical analysis, and checked news sources too, it still happened that the market moved in the opposite of the direction to which your trade was going. This isn’t a major problem because you already realized and stopped your trade. It is possible that you may not have realized this point because you aren’t looking at the system. Your account could be zero if you don’t. If you’re in a successful trade, the market may have reached the point where your profit was expected and then veered the opposite direction. Even if you only left your computer for a brief moment to make a cup coffee or grab something, your Profits can be turned into Losses.

You should always set stop-loss and profit targets when trading Forex to avoid these types of situations.

Stop Loss: The price at which you want your order to be closed when you are losing money on the stock market. In the event that market has a significant move, it will help you avoid your account being zero.

Take Profit is the maximum price at which you will exit your trade after reaching your anticipated profit. The take profit helps in protecting your gains in the case that the market goes in the wrong direction once it has reached your predicted level.

When you use a trailing stop limit, your stop-loss limit will move along with price changes. The stop loss limit moves with the price.

In the example above, you could place a long/buy trade with a trailing stop at 10pips. Then set a take profit of 30pips. After the market moved 20 pips in your direction and 20 in the reverse, you can now move your Stop loss by another 20 pips. You set your Stop Loss at 10 pips under the price of your entry. It is now 10 points above that entry. Then, if stop Loss still occurs in the trade you make 10 pips. Here’s how you can make profits with a Trailing Stop, even if your Target Profit hasn’t been met.