Como obtener dinero de forex35 comments
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Profit target is the price set on the chart where we plan to exit from the trade. If we set the PT to and the market gets to the price, the trade automatically ends with a predefined profit. Stop loss represents the maximum loss we want to accept with a certain trade.
If we set a point SL and the market will go against us and moves even further against us for another points, we will receive a predefined loss of only 50 points because we have set our SL. SL may be influenced by the slippage we have already written about , but this is usually not critical and in most cases it is just few points.
We sell at 1. If the price reaches the level of our PT, we take the profit. Downtrends are having constantly lower and lower high, so we suppose that the price should still decline, so shifting the stop loss over to the last high is an often-used step. To make it clear. When setting the SL, we must take into account natural market movements and its dynamics.
The size of the stop loss is different for each individual market. Some markets can work with smaller stop loss and some need bigger ones. If the market has an average daily range from high to low of over pips for example, British Sterling , we must expect a higher stop loss here.
Usually, however, the larger stop loss means bigger potential gain. In general, one rule applies to the stop loss. Stop loss is what protects you from massive loss and erasing of your account.
S o never trade without stop loss, always have it in place! We can only skip the stop loss it if we trade the long-term trends over months and years and we do not use leverage, but that involves minimum traders. We are getting to the more pleasant part. Like stop loss, the profit target varies by market, strategy, and also by a trader. It does not apply that PT should be larger than SL. We should also try to place a profit target in the logical zone, for example, if the market is in uptrend and in correction, we should place PT at the last high level.
Or, we can place PT at a higher level and speculate for a longer period of decline. The rules are basically similar to the SL, but with the difference that PT does not necessarily have to be set in the market, we can act differently — according to the state of the market, the indicator, for a certain time … There are many options. Your email address will not be published. Enter your e-mail to register to the free course: Register If you have account already, Log in here first.
This is best illustrated by the following figure: Use of the profit target in practice We are getting to the more pleasant part. In the next article we will talk about leverage.
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