Apart from the fact that Forex trading is really fun to do, it is ultimately a matter of course for many traders to play the marbles. Making sure that you place more profitable than lossy trade orders.
To ensure that at the end of the day, week or month the indicator points to the profitable side, you ensure that you take a number of measures and observe rules both before, during and after the event. In this article you read the most important
# 1 Use stop-loss
In the Meta Trader 4 software you can easily set a stop-loss. In case of a stop-loss, a trade order will close automatically as soon as the price reaches the stop-loss limit. Always set a stop-loss with every trade you place! Knowing how to do this, read the article on this page of ForexHandleiding.nl
# 2 Use Take-Profit
Setting a stop-loss will limit your loss, but there is also a way to ensure that your profit is not swallowed again when the price suddenly turns against you. You use a take-profit for this, and you also apply that to every trade order.
Suppose you set the take-profit to 20 PIPS and due to a sudden price fluctuation the price first rises 40 PIP and then drops 80 PIPs. Because you have set up a take-profit, the order will be automatically closed as soon as the 20 PIPs profit line is hit. You will not benefit from the other 20 PIPs, but will not make a loss at the moment that the price drops and 80 PIPs drops again.
# 3 Set goals
Professional traders express their profits and losses not in money, but in numbers of PIPs. Profit is for example 20 PIPs and how much this is in cash depends on the volume with which you trade.
Who will act establishes certain goals in advance. It is best to formulate those goals as specifically as possible. Do that by setting the profit of an x number of PIPs as the intended goal.
On an average trading day the price will shift somewhere between 30 and 180 PIPs. That can be an increase or a decrease, or even a combination of both (first up, then downwards or the other way around).
Place your trade on the basis of the information you have collected and use a take-profit to ensure that as soon as the price hits your target, the order is closed.
# 4 Keeping your goals
Every form of investing involves a certain risk. Forex is no exception and the market can sometimes make very weird movements. Once you have set and achieved your goal, do not try to get out of it. Close the order and take your profit.
# 5 Grab your loss on time!
Losing suffering is part of the trading. Starters, experienced traders or professionals: everyone gets involved. A good trader picks up losses at the right time.
Here too, you have thought beforehand about what an acceptable risk is. You have set a stop-loss based on this acceptable risk (if it is good). Stick to that and do not adjust the stop-loss. Take your profit, check where it went wrong. Could you have prevented this loss or could it simply not be foreseen?
# 6 Grab your winnings on time!
Keep yourself to the goal you have set. Is that achieved, take your profit. If your plan is 20 PIPs per day and you have achieved that, go and let the dog out, drink a cup of coffee or do some shopping and let it act for what it is. After all, you have achieved your goal for today!
Only the tip of the iceberg
Limiting loss and protecting profit is of course an important part of Forex trading. The tips above are just the tip of the iceberg. This is because the trading is mainly about placing the right trade orders at the right time. That requires knowledge, experience and especially patience.
Make sure you have a good trade plan and set realistic goals. Let it trade for what it is when you have achieved goals or incurred the maximum acceptable loss for that day. Trade as little as possible with emotion and make sure you extend your basic knowledge about Forex trading step by step.