As a general rule of thumb, traders should set Stop-Loss orders closer to the
opening price than Take-Profit orders. If this rule is followed, a trader needs
to be right less than 50% of the time to be profitable. For example, a trader
who uses 30 pip Stop-Loss and 100-pip Take-Profit orders, needs to be right
only one-third of the time to make a profit. Where traders place Stop-Loss
and Take-Profit orders will depend on how risk-averse they are. Stop-Loss
orders should not be so tight that normal market volatility triggers the order.
Similarly, Take-Profit orders should reflect a realistic expectation of gains
based on the market's trading activity and the length of time one wants to
hold the position. When initially setting up a trade, it is prudent to look to
change the Stop-Loss and set it at a rate in the "middle ground" where you
are not overexposed to the trade, and at the same time, are not too close to
Trading foreign currencies is a demanding and potentially profitable
opportunity for trained and experienced investors. However, before deciding
to participate in the Forex market, you should soberly reflect on the desired
result of your investment and your level of experience.
Warning! Do not invest money you cannot afford to lose!
There is significant risk in any foreign exchange deal. Any transaction
involving currencies involves risks, including, but not limited to, the potential
for changing political and/or economic conditions, that may substantially
affect the price or liquidity of a currency.
Moreover, the leveraged nature of Forex trading means that any market
movement will have an equally proportional effect on your deposited funds.
This may work against you as well as for you. The possibility exists that you
could sustain a total loss of your initial margin funds and be required to
deposit additional funds to maintain your position. If you fail to meet any
margin call within the time prescribed, your position will be liquidated and
you will be responsible for any resulting losses. "Stop-Loss" or "Take-Profit"
order strategies may lower an investor's exposure to risk.
Easy-ForexT foreign exchange technology links around-the-clock to the world's
foreign currency exchange trading floors to get the lowest foreign currency
rates and to take every opportunity to make or settle a transaction.
Trade like a technical analyst does. For the best possible results,
understanding the fundamentals behind an investment also requires
understanding the technical analysis method. When your fundamental and
technical signals point in the same direction, you have a good chance of
having a successful trade, especially with good money management skills. Use
simple support and resistance technical analysis, Fibonacci Retracing and
Discipline includes hitting your stops and not following the temptation to stay
with a losing position that has gone through your Stop-Loss level.
A good rule of thumb is: In a bull market, be long or neutral - in a bear
market, be short or neutral. If you forget this rule and trade against the
trend, you will usually cause yourself worries, and frequently, losses.
Never add to a losing position. On the Easy-ForexT platform, traders can
change their trade orders as many times as they wish free of charge, either as
a Stop-Loss or as a Take-Profit. The trader can also close the trade manually
without a Stop-Loss or Take-Profit order being hit. Many successful traders
update their Stop-Loss price in their "live" positions beyond the rate at which
they made the trade, so that the worst that can happen is that they get
stopped out and still make a profit.