Stop loss in forex trading – forex trading basics

Stop loss in forex trading:

Stop loss is an option in forex trading, it is used for the sake of minimize the loss. This is necessary when the trader doesn’t know the actual movement of the market. Some traders trade with the trend of market and some trade against the market trend. This is depends upon the strategy of a trader. To understand these things, traders need to understand the strategy and how to make their own strategy. Every trader should make his own strategy to trade in market.

Stop loss is a part of strategy, whether it is for longer term or short term trading strategy. It is basically an important part in forex trading. What this option do? by using stop loss, traders limit the market execution to certain pips and then reduce pressure of sudden market movements that may cause zero equity in the market. It may result in clear account wipe out. It can be used after the spread of the pair. After some movement of market. The points of stop loss can be changed by drag and drop in metatrader.

Stop loss in all market conditions

Don’t expect that this option will help in all circumstances. There are a lot of forex brokers do not execute the order in high fluctuation and some brokers deny to close the orders on stop loss, while market is high volatile. Everything depends upon the volatility of market. Forex brokers give higher leverage but they also keep an eye on the profits of traders. They don’t allow traders to trade in shorter terms. Some brokers have some restrictions regarding orders execution. Whether you have fixed the stop loss but they have restrictions for traders to keep the trade open for at least ten minutes.

This is to prevent some gambling and sudden loss of forex brokers while the market is volatile. Some brokers also do not allow traders to trade by using scalping strategy. This strategy is very much useful and money making strategy. Brokers usually do not allow this strategy. This is because the trader keeps opening and closing of trade within shortest time. Sometimes even within one second, trader open and close the trade with the help of expert advisor. These kind of robots work in some conditions, not in all conditions.

In simple words definition

In simple words, stop loss is a limit where market touch that limit and the order close with market touch. This is simple explanation of stop loss. But not only this thing work in loss, it work in profits too. Traders can use trailing stop loss in running market. This thing can happen when you are in profits and you are going to limit the maximum profits from market. At that time if the market returns back then at that time stop loss will close the trade with less profits. This is also helpful for those who want to do open trades and do not fix the target. Trailing stop loss is best for those who play blind game.

Stop loss is a basic option in metatrader 4 and 5. It helps a lot in trading whether it is longer term strategy or shorter term strategy. This option is available in classic trading using metatraders. It is not available in binary options as it already contain a limit of profits and loss. Traders can use this option with several expert advisors and that thing works fine with these robots. These things can be used in different crypto exchanges too.

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