Forex Is All About Managing Risk

The first of the half of the trading is won by managing your decisions related to investment of money while other half can be won by managing the risk and risk management can be done by preparing the entry and exit timing from the Forex trading platform.

The exit from the Forex is possible through implementing the tool of orders at the right trade and at the right time helps you to manage the risk involved in the currency pair exchange deals.

All management works on the fact of the right timing it is all about management of exact entry and exit timing that enables the traders to lock your profitable trade moves against the risky currency rates.

One more thing to add here is that it is of utmost important that the trader should not use these stop- loss orders loosely or very tightly because both the extreme conditions of using the trades will not work out for locking your profitable trades at the Forex trading platform.

Initial Implementation of Stop loss order: 

When you go into a Forex trade, you should fix on a stop loss order prior to your entry in Forex. Because if you are prepared with the stop loss decision then you can manage to save your profits even if the trade fails.

Pip value is calculated, the product of account and percentage of risk involved dividing it by the number of pips in the stop loss.

For instance, there is an account with $4000 with the risk limit of 2% at each trade and the stop loss entry should be of 30 pips then the pip value would be-

5000 x 2% / 30 = $3.3 USD per pip.

Trailing stop loss order: 

Trailing stop loss order is more feasible because it follows the currency pair action by a set amount of pips and locks the profit when the rate of the currency pair is reversed.

It is very useful in Forex short-term trading platform or when the traders are not able to observe the trade moves because it is carried out very fast.

The disadvantage of using trailing stop order is that it breaks off with the retracement in the Forex trades and the price action prior to the completion of the trade.

These stop orders if used properly can prove to be very efficient tool and helps to put a check on your trade moves that will in turn retain your profits even when the Forex trends are moving against our set trade moves.

With the aim to fetch profits from forex trades, the trader should have the ability to manage the correct entry and exit timing along with the ability to manage your trade orders as per the demand of the market circumstances.

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