IQ Option has recently added Forex to the collection of the trading instruments, and made it in an innovative and engaging way. All basic concepts and principles of Forex trading have already been summed withing the scope of this article. Deep understanding of the underlying principles and mechanics is essential to professional FX trading.
Stop-loss is an order that you, as a trader, send to your Forex broker to limit your losses in a particular open position. Take-profit works in much the same way, letting you lock in profit when a certain price level is reached. Preferably, in the right way and at the right moment.
Several strategies exist, making the decision process harder but also providing the trader with additional opportunities.
What is a stop-loss and why would anyone use it in trading? By opening a stop-loss order you determine the amount of money you are willing to risk in a case of each particular deal. IQ Option trading platform calculates the said amount as a percentage of your initial investment. Cutting off losses at the right moment is one of the skills all traders have to learn sooner or later should they want to reach certain degree of success. Professional traders do believe it is wise to adjust stop-losses to market conditions, not only the amount of money you are ready to sacrifice.
Taking technical analysis into consideration can also be practical. And remember, the majority of traders agree: It shouls be based on your trading strategy and market conditions. Feel free to close a deal should the market demonstrate unfavorable price action. But at the same time do not let your emotions intervene.
Have you ever noticed how devastating emotional trading can get? In other words, it should prove the chosen strategy does not work. Otherwise it may be a good idea to wait. Stop-loss and take-profit work in pretty much the same way but their levels are determined differently. Stop-loss signals serve the purpose of minimizing the expenses of an unsuccessful trade, while take-profit orders provide traders with an opportunity to take the money at the peak of the deal.
Taking profit at the right time is as important as setting optimal stop-loss signals. Market always fluctuates and what seems like a positive trend can turn into a downturn in a matter of seconds. Some would say it is always better to take respectable profit now than to wait and risk losing your potential earnings.
Note that not letting your profit grow high enough and closing the deal prematurely is not good either, as it would eat up a portion of the potential profit. Waiting for too long can be equally detrimental. The art of take-profit orders is to pick the right moment and close the deal right before the trend is about to reverse. Technical analysis tools can be of great help in determining the reversal points. Certain traders will recommend using a 1: In such a case, even if the number of losses is equal to the number of successful deals you would still be generating profit in the long run.
Rather rely on it in order to get better control of your deals and emotions. This article is not an investment advice. Any references to historical price movements or levels is informational and based on external analysis and we do not warranty that any such movements or levels are likely to reoccur in the future. The financial services provided by this website carry a high level of risk and can result in the loss of all your funds.
You should never invest money that you cannot afford to lose. I kindly ask you to contact our support from your personal cabinet to get a certain help. Thank you in advance! There are 5 comments 5 comments. MC 2 months ago. Zukhra IQ Option 2 months ago. Bhushan Naik 1 month ago. Zukhra IQ Option 1 month ago. Leave a Reply Cancel reply Your email address will not be published. Comment Name Email Website.
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