What is a stop loss & take profit order?

A stop loss order is when a trader indicates when they are ready to close their position, even if they are not near their device. Forex Stop Loss and Take Profit orders are executed automatically by trading platforms. That’s right, a stop loss order will remain active even if you are not touching your computer or smartphone.

What is a trailing stop & a take profit order?

Trailing Stops work best in calm conditions when prices are trending gradually. A take profit order is the exact opposite of stop loss orders. This order type tells your broker to close the position, once the price reaches a certain point. The order is executed automatically.

How to set a stop loss and take profit?

To set a stop loss and take profit in a proper way, you’ll have to consider the characteristics of the trading strategy. For instance, a mean reversion strategy will behave quite differently from a trend following strategy, which requires a somewhat different approach. This applies both to the stop loss distance and exit method that should be used!