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Forex Stop Loss is more significant than Forex Take-profit part 1


Forex Stop Loss is more significant than Forex Take-profit. Then how can we set the stop loss to prevent Forex margin call?

Setting Multiple Stops

There are times when few market-makers make huge trade to manipulate the market in attempt to harvest your stop and acquire profit from it. Some traders put multiple stops to avoid letting any currency value left to harvest your trade. Another reason to set up multiple stop: if an unexpected market movement sweep away the position taking out the first and second stop, and if the market reverses, your trade is still in the play for some portion.

Stop then Reverse

You can set the stop loss at a certain point and simultaneously enter a new trade in the opposite direction as soon as stopping. This is not for a beginner’s play, because not all brokers accept this strategy as a single order. For this strategy, you need to put new order that reverses the previous order by entering new stop in the new direction

Trailing Stops

There is a saying in Forex “Cut the losses short, Let the profit run long”. Trailing stop is a strategy where you put stops that will adjust as the trade moves in favorable direction to restrict the downside risk of being false in a trade. This strategy trails behind market movement with fixed amount. If the trade is going towards profit, the trailing stop moves upward with the increasing market price. By doing this, you can tolerate the same amount of remaining percentage in losses throughout the trade. If the market goes against your trade, the trailing stops and protects the closure of the recent gains.

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