Stops in the Forex or how to protect transaction.

Forex trading is a risky business, so the main task of the trader, not only to earn, but do not stay without their own money.

The latter happens more often than the first, and the main reason for which the majority of beginners lose their own deposits is the total disregard stops.

There are several options for protecting his position from full discharge, each of which has its own advantages and disadvantages.

Which actually need this protection? Firstly, you will not always be located at the trading terminal, in the second broken links or other technical failure, in the third course can happen can begin to change so quickly that at the time of closing, you will lose a few extra points.



Option one.

The time-tested a stop loss order is set during the opening of the new order is triggered as soon as the price reaches the level you specify.

For example, you buy EUR for USD at the price of 1.3050, stop loss stands at 1.3020, if the exchange rate instead of the expected growth will go down on their own warrant close at 1.3020.

The main advantage of this embodiment is that the stop loss fire even when stopped trading terminal.

And if we talk about the shortcomings - can not always be set to close 10-15 points to the current price at gepah triggered at the first available quotation, you must manually move the price for profit.

Option two.

Trailing Stop - an analogue of the previous order, but unlike a standard stop loss, independently moving the price.

Movement occurs only in the direction of profits, thus achieving its maximum fixation.

The only disadvantage is that the order is only running at the trader terminal, the problem is solved by transfer of the terminal on the virtual server.

Option three.

Less common, but still quite popular this hedging by using a pending order.

In this case, when unfavorable circumstances your transaction does not close, and in addition to it will happen discovery hedgehog one position to the same extent.

For example, you open a deal to buy for EUR / USD in the size of 1 lot, while slightly below the current price expose pending order to sell, just one lot. If the price goes down Loss locks, and after you only have to choose which of the orders to close.