Stop Loss and Limit

As with other business sectors, investment in margin trading FOREX has the potential losses. However, the interesting part of this business is that the risk level can be set from the beginning, so it can know the potential level of losses that will occur.



This brief article will help you how to put the "fence" in your position so that the risks that might occur can be limited as far as we want. So is the profit gained can we limit it. The reason why we limit the profit here is because of the nature of the currency itself is a very volatile / fluctuate so that our position may now have become a profit loss due to exchange rate has moved indigo reversed from what we want.



Now imagine if you are an employee in an office and also invest in forex trading. Say you trade at night and during the day you have to work and not be able to monitor your trading position. What if when we are monitoring our trading positions and prices move opposite to our position and even move opposite too far. It could happen a margin call (closing of positions in margin loss due to lack of collateral). Of course this is not our desire.


That's why the facility provided "fence" or limit in any forex trading platform. Point to prevent the unpredictable circumstances that affect our trading portfolio too far. The second boundary is termed a Stop Loss and Limit.

Stop is willing to limit our losses while the limit of responsibility is a limit to profit target that we take.