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Stop Losses in Forex Trading

This is a very popular strategy in Forex and most of the traders set Stop-loss to save their capital. This presentation going to tell you some ideas of stop losses in forex trading.

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Stop Losses in Forex Trading

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  1. Stop Losses in Forex Trading

  2. Index • Stop Losses in Forex Trading • Types of Stop-loss

  3. Stop Losses in Forex Trading • The Stop Losses function is a valuable tool to safeguard the value of foreign currency trades. • It is especially true when the price of the forex pair starts to move into negative territory. • You simply set the stop-loss level, which determines the most you can lose on position if the price moves against you.

  4. You should bear in mind that the stop-losses can work for you or against you in the online trading. • While they protect against sudden movements in the price, they can result in fear based trading which is equally detrimental.

  5. If you decide to maintain the narrow stop-losses and collect on winning trades too early, this will result in the incremental wins and losses. • And there will be a loss of overall trading activity.

  6. Types of Stop-Loss • If you are wondering how stop-loss can help you while you are trading, it is a good idea to understand the several different stop-loss tools and techniques. 1. Average True Range • This stop-loss technique is used in many charting packages, and it factors volatility into the price of tradable instruments.

  7. 2. Trailing Stop • It is possible to secure your profit while limiting your risk, by using a trailing stop. • It is a special type of stop-loss adjusts your stop level automatically when your position runs into profit, to lock in your gains.

  8. As the price of the tradable instrument rises, so too does the stop-loss. • But when the price falls beyond the stop levels your position is closed automatically as with a normal stop loss.

  9. 3. Guaranteed Stops • This stop-loss allows you to limit the risk on trades even when market gaps occur. • A Guaranteed Stop always represents the maximum that you can lose on a position, and there is a small premium for the absolute risk protection.

  10. Thank You

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