Dick MC Mahon

For receiving a profit a trader must apply a simple rule, which is to buy the currency cheaper and sell it more expensively, in the Forex trading. To do this, the trader gives commands to sequentially open and close trading positions. The opening of a trading position is made by the broker on a market order or on the execution of a pending order, and the closing of a position at the request of the trader or at execution of the stop-losses and take-profits.

The task of stop-loss is to restrain potential losses. Take-profit is an order, analogous to stop-loss, but precisely inverse of it. The purpose of this order is to help the trader to conclude the deal profitably. Placing take-profits and stop-losses enables the trader not to be all the time in front of the computer, waiting for the outcome of the trade. Take-profits and stop-losses will be fulfilled in the automatic mode when the price comes to a certain level, so after issuing them, you can safely turn off the computer and wait for the one of the orders fulfillment. It is better when the take-profit is executed more often. Using the features of MetaTrader 4, you can put stop-loss and take-profit orders right at the moment of the deal execution or subsequently adjust the levels of stop-loss and take-profit orders. The level of the stop-loss should be fixed, while the level of the take-profit should be twice bigger than the level of the stop-loss.

Setting stop-loss and take-profit levels by a trader on Forex market is especially individual in each transaction. It depends on what part of the capital to which a trader decided imply risk in a particular transaction, but a number of rules and methods is available. But if you do not put stop-losses and take-profits it is very risky and such method is used when the trader manages a very small share of the capital (less than 2%) in a transaction, and sure that his Forex broker will not allow “slipping” at the order’s closing. In addition, making such a transaction you must necessarily always have another line from another provider of Internet ready if a crash occurs. When a power cutoff happens you have to be able to directly switch to the battery backup. If you do not take care of these precautions in such a transaction, you can quickly lose a significant portion of your Forex online deposit.