The Stop Loss Order

When you trade the forex market, your trade can go very well - you can make 100% in minutes and enjoy a daily income of thousands. However, just as trades can go well, they can go terribly wrong, and you can lose your entire trade in minutes.

Exactly for that the stop-loss order was created. Every forex broker lets you use it. It allows you to specify a price in which the position will be terminated. If you are on a "long" position (buying), the position will be sold. If you did short selling, your position will be bought back.

The big benefit of a stop loss order is clear. It allows you to set the maximum amount you're willing to lose. This is the heart of every forex trading system. Without a good stop loss, you're going to lose very fast.

However, a stop loss order can be a two-edged sword. Sometimes the exchange rate can just "touch" the stop loss point and then rush towards your original goal. This situation is very frustrating, and it causes loss of faith in the system. However, if the system is good, most stop loss orders are good.

Good luck with your trades and stop loss orders,
Nadav

nadavs