July 7th, 2010
Posted in Original article by Forex Automator Pro
There are 2 sorts of conditional order that you can place with forex trades : the stop loss ( often written stop / loss ) and the limit order.
The stop loss is a well known order that controls the risk concerned in a trade. With a stop loss, you say to the broker, “If the price goes this far against me, I want out. The stop loss will kick in and protect the majority of your funds.
A limit order is similar but applies to the opposite situation, the situation where you’ve got a winning trade. With a limit order, you are saying to the broker, “If the price reaches this level, that’s’s enough, I’ll close there and take it. ” The limit order will be caused if your pre arranged price is reached and the trade will be closed at that cost. Many traders are reluctant to use limit orders when they first start out. It seems counter intuitive.
So unless you’ve got a system that is set up with very precise standards to tell you when to shut a trade, you’ll doubtless be better off if you use limit orders.
Tags: brokers, currency trading, day trading, expert advisor, forex software, forex system, forex trading