Where do you set them? Back testing your system can be beneficial here. You can check through the last months and years of markets that would trigger a trade under your system and work out what would’ve been the optimal setting for the limit order. Remember naturally that past results aren’t always going to be repeated in the future. This can mean that you just need to score a 50% success rate to be in profit. Setting the limit order at twice the pips of the stop loss, either before or after spread, might be acceptable. However , this depends on your system. Don’t avoid the testing.

Using limit orders has another valuable benefit too. When you have both stop loss and limit order prepared you can move away from the PC and get on with your day. There is no need to watch each little fluctuation of price until one or the other one is triggered. So using limit orders in foreign exchange trades makes for a happier, more profit-making trader.

Tags: currency trading, Forex, forex software, forex strategy, forex tips, forex trading, trading

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