Trailing stop forex tutorial

If the DAX 30 were to hit a high of 10, before retracing by 70 points, your trailing stop will have been fixed at 10, and your position closed out, earning you a profit. Please bear in mind that trailing stops are not guaranteed, and so can be subject to slippage. How do I edit stops and limit orders on a position? What is the difference between a stop and limit order?

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A trailing stop order can limit your losses a position, just like a normal stop order. However, unlike a normal stop order, the trailing stop level will follow the position if it becomes increasingly profitable.

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You would therefore place the trailing stop below the market price on long positions and above the market price for short positions. How to use a trailing stop. A trailing stop enables you to protect a position, without the risk of taking profits too early. If the position moves smoothly in one direction, your stop will follow it, until there is a pull-back big enough for the position to reach the stop price.

The first and the easiest way to add Stop Loss or Take Profit to your trade is by doing it right away, when placing new orders. To do this, simply enter your particular price level in Stop Loss or Take Profit fields. Remember that Stop Loss will be executed automatically when the market moves against your position hence the name: stop losses , and Take Profit levels will be executed automatically when the price reaches your specified profit target.

To do so, simply drag and drop the trade line up or down to specific level.

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Stop Losses are intended for reducing losses when the market moves against your position, but they can help you lock in your profits as well. While that may sound a bit counterintuitive at first, it's actually very easy to understand and master. Your original Stop Loss, which was placed at a level below your open price, can now be moved to your open price so you can break even or above the open price so you are guaranteed a profit. To make this process automatic, you can use a Trailing Stop.

As soon as the position turns profitable, your Trailing Stop will follow the price automatically, maintaining the previously established distance. Following the example above, please bear in mind, however, that your trade needs to be running a profit large enough for the Trailing Stop to move above your open price, before your profit can be guaranteed. It's worth mentioning that if you're using xStation instead of MT4, your Trailing Stops remain in place even if you log out. Your Trailing Stop is now active.