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Using Stop-Loss strategically in the forex market


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In Forex, it is very normal to lose trade. That is why there is an option of stop-loss. This option is a blessing for both the professional traders and the newbie traders. This Forex market is highly unpredictable. One moment the market is going up and you can surely place a trade. But after your placing the trade, you can see the signal going down and down in front of your eyes. This can happen to anyone. Even the professional traders are not Gods. They also use the Stop-Loss button to prevent a disaster from happening. This article will tell you not only how you can use the Stop-Loss to minimize your risk but also to increase your profit.

Placing Stop-Loss strategically
Most of the traders take the Stop-loss as an option for only to minimize the risk. It is an option that closes or executes your trades when the price level is going down for your trade and minus your money from your account. But Stop-Loss is much more than. It is a strategy used by the expert traders. SaxoTraderGo is robust trading platform offered by professional broker Saxo and most of the expert use the advance stop loss features of this platform to maximize the profit margin in the market. So always make sure to use the protective stop loss features in the market to reduce the risk factors in trading.

Trailing stop loss
When you are using the Stop-Loss in Forex, do not place it too close to the opening price of your trade. The more close you put the stop-loss to your openings, the less money you will lose. Most of the traders take the stop-loss as only an advantage of stopping lose. But it is also an advantage of taking profit strategically even when the market is going down. You can also use trailing stop loss features in your trading platform to maximize your potential profit in a profitable trade. Most of the novice traders in the financial market use the trailing stop loss features with a fixed percentage rule but in order to ride the long term prevailing trend in the market, you need to use it with the help minor support and resistance level.

To know how you can take the strategic advantage of Stop-Loss by placing it strategically, think of a scenario. You have placed a trade and it is going down. You have placed the Stop-Loss close to your opening price level of the trade in your trading platform. If the market goes down, you would not lose much money. This is often known as setting the stop loss to the break-even position.
But what will you do if the price level starts to increase once more? You can make a good profit in this strategic advantage because you have placed the Stop-Loss with a distance from your opening level. This distance keeps your trade from closing early in the market. The professional traders know this advantage of the strategic position of Stop-Loss and continue carry their when most of the traders have closed their trades and lost money. This strategically uses of Stop-Loss can bring you profit from an apparently losing market.

Summary: Everything has a purpose. Use your knowledge and take advantage from every strategy. Use Stop-Loss as an increasing profit tool, not to early exit the market. If you consider trading as your full-time profession in the market then it’s very obvious that you will often have some losing orders in the market but you need to accept those losses in the market. Never trade with the money that you can’t afford to a loss in the forex market since losing is inevitable in trading.