Forex trading has always been a pretty high-risk occupation, because the task of the trader has always been to reduce losses from possible operations in the market. One of the tactics that allows this to be done is to place special stop-loss and take-profit orders. These orders make it possible to close an placed order when the price reaches a certain level, regardless of whether your terminal is working or not, and you have the opportunity to be at the personal computer at the time of an increase / fall in trend.
Stop-loss order. Often working with such an order, beginners try not to use it, hoping that suddenly the position will close and the price will again move in the right direction. But fascinated by such hopes, novice traders lose their deposit, which quickly changes their decision. Determining the location of such an order is quite simple. To do this, you need to track the points of minima and maxima on the price chart of the trend. If there is an uptrend in the market and the trader opens a deal to buy, then it is necessary to analyze the points of minima, and vice versa, if there is a downward trend, it is necessary to analyze the maximum points.
Take-profit order. The main objective of such an order is to close your position with a planned level of profit, which is especially important when the price does not stay on the same level, but only makes a touch and the trader does not have time to react to the changes. The main principle of placing such an order is that it must be larger than the stop-loss order for the same deal. In this case, with the same number of positive and negative results of the transactions, the trader will still be in profit.
This order is best used in transactions where a trend reversal may occur, and you can use the price channel to determine this situation. Only in this case it will be necessary to use the opposite approach. For example, in an uptrend, the take-profit order setting point is the approximate price maximum before the next rollback. Also, such an order can be used based on the average daily volatility of the currency pair, but then in this case it is very desirable to make an indicative forecast of the trend movement.
Trailing Stop Order. It is a floating stop-loss, following the price and transferring the order to the breakeven zone. Such an order is placed after a position is opened, however, it can only be worked on relatively long time intervals and with high market volatility. The main rule for the successful application of the order: the movement of the trend should be more than 15 points, otherwise it is better to use the usual stop-loss. It is also very important to remember that the function of this order only works when the trader’s terminal is on! If your computer is turned off or the terminal is closed, only the stop order linked to this function is triggered.