Lesson No 9
In our lesson No 7 we have learned how to
start our first trade through instant execution, there are two options in this
case i.e Stop Loss and Take Profit. In
this lesson we will learn how to set stop loss and take profit limits and how
these two options work.
So, if you are going to buy any pair your
take profit limit must be less than the price showing above sell button in case
above sell button price is shown as 1.0525 then your take profit limit must be
any value less than this e.g it may be 1.0500, now it is time to set your Stop
Loss, if you have analyzed that market is fluctuating between 1.0495 to 1.0580
then your stop loss may be a little above 1.0580, it means that you have assessed
that if price will go up till 1.0580 then there is chance that it will come
back towards our take profit limit i.e 1.0500 and if it will go more beyond
1.0580 then there are chances that it will go more above this value and if it
will keep going above it will increase our loss so we have set our loss on the
limit very near to 1.0580 it may be 1.0585 so if market keep going on and it
hits 1.0585 our stop loss limit will hit and our trade will be closed with a
loss of almost 55 pips. It will prevent your
trade to incurred more loss if price goes upto 1.0700. In case you have not set your stop loss limit
and market goes upt 1.0700 then your loss will be 175 pips which is very high
than 55 pips.
Stop Loss and Take Profit options make
your trade automatic in case any of your limit is hit your trade will be closed
automatically, in case you haven't set your take profit limit and price goes
down till 1.0480 and you are not on your trade terminal and soon this price
comes back to 1.0540 then it means you have missed a chance to earn profit, so
either you have to stick to the screen to have keen eyes on your profit and you
can close trade at any good profit or the other option is best i.e automatic
trade with a take profit limit. Same is
the case with stop loss option.
Now its upto you that which options
suites best if you have enough time and you are good to work online for more
times and love to keep on looking market trends then you can chose other option
i.e manual trading and you can close your trade at any time you earned good
profit or can close at any point to avoid huge loss. And if you are not so, then I will advise you
to always do automatic trade with take profit and stop loss limits as it will
not only save your time but will earn good profits for you.
