This material is dedicated to one of the most important aspects of trading – this is Stop loss and Take profit. How can I use these protective orders, how can I plan my transactions?

Orders (Take Profit and Stop Loss) are used to lock in profits or minimize losses. They are always used in conjunction with market or pending orders, as well as with a previously open position.

 

Stop Loss and take Profit

 

Let us consider in more detail, directly in the platform, where exactly it is possible to place these orders.

 

What is stop loss

 

Let’s analyze the deal opened on EURUSD in one contract. In the terminal, selecting the View – Ctrl + T terminal section, we will see open transactions in the trading section and we can also observe such a position as profit or loss of a transaction and directly set Stop Loss and Take Profit. At this stage, these values ​​are not set.

In order to set the value of Stop loss and Take profit correctly, you must first go to the trading instrument, where the transaction is open and transfer it to the chart.

Moving to the 1D time frame, on which the candle represents one day of wobble, each candle is directly displayed within one day 1 day.

 

what is take profit

 

We see the dotted green line – this is the opening point. To limit your losses here – we go into the order (right-click on it) – the settings are then clicked to modify or delete the order.

Next, you need to make the parameters of your Stop Loss and Take Profit directly on the chart. For this it is necessary, for example, to drive 500 and for example 1000.

In financial markets, there is such a thing as a fractional lot not a standard four-digit, but a five-digit one. Accordingly, in MT4 it is displayed taking into account the fifth digit, it is considered 500 – 50 points, 1000 – it is considered as 100.

 

How to stop loss and take profit

Clicking on the red and blue rectangle “copy”, set Stop loss in the amount of 50 points from the current price and Take Profit 100 points from the current price. Pay attention to the graph now shows a red dotted line that shows the Stop loss and Take profit levels.

 

Stop loss and take profit practice

 

We can see that when this zone is reached (from below), Stop loss will work and we will get a loss of 50 points (multiplying 50 by 10, that is, in money equivalent it is $ 500), respectively, the planned profit of $ 1000. that the market can reach this zone and we get a profit!

Tools such as Stop Loss and Take Profit help not only beginners, but also experienced traders to trade! Therefore, it is very important to find out exactly how they work and what are their advantages.

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