Traders often discuss the need of using stop loss and take profit orders. Some of them are sure that they are not necessary at all, others state that there can’t be a proper system without them. These disputes confuse many newbies and they can’t get what to do. Here we are to spread the light onto this ambiguous question.
Stop loss (SL) is an order that helps to limit potential losses by closing an unsuccessful transaction.
Take profit (TP) is an order that closes a winning trade and takes the money for you.
To be honest, these orders are the most substantial parts of money management. They protect a trader from losing money and help to fix his profit. In other words, SL and TP are great helpers in managing a trading system. So, after setting them you can keep calm and be sure that you won’t lose a significant part of your overall funds, or will get the profit you expect.
The main benefits of SL and TP
– You can get rid of excess emotions and need of watching the charts closely during trading.
– Your losses would be measured. Sometimes a trader can hope for a reversal and lose everything. SL insures from such situations.
– These orders help traders to minimize risks during news events of high volatility.
So, stop loss and take profit don’t interfere the working process. They just insure your funds and help you not to lose money. Be careful on the market and feel free to use them. You’ll be protected from some unpredictable happenings on Forex.
We wish you consistent and comfortable trading!
“A writer and a PR manager of JustForex (https://justforex.com)”