Stop Loss Orders, Trailing and Stops Market Orders

Forex investments are mostly hard earned money we want to earn profits from forex trading. Some forex capital can also be borrowed from forex dealers or brokerage firms. Either way, we need to protect precious forex investment money along with profits derived from it. A way of protecting them is through forex stop loss orders.

Forex stop loss orders are limits for our investments. They make sure we regulate our investments, protect our profits, and limit any losses. There are various kinds of forex stop loss orders. One is called Market Order, specifically used for exits. Trailing stops, on the other hand, is an excellent way of protecting profits when an exit trade strategy is yet to be planned. This is done upon entrance to a forex trade.

The movements that our stop price can have are affixed within a distance limit from the market price. When prices increase trailing stops are also increased during a long trade. But the moment they fall a trailing stop remains as is. The trailing happens only when market prices move to benefit the trade where the forex stop loss order is done. Specifically, stop loss orders protect against our losses while a trailing stop protects our profits.

Trailing stops also help us lock in levels of profit and they actually follow along or trail our growing profits and regulate our forex stop loss points. While assuming an open position in forex trading trailing stops are altered by traders, and this could at times be confusing. So we must be careful not to make this mistake. If we change trailing stops often, we're not confident of the trade. In such case we better exit the trade.

While trailing stops limit risks, they also make room for more profits through the trade momentum. This is vital in risk management, especially in the absence of an efficient exit tactic in their trading system. Trailing stops are a great help to make our risks more secure. And speaking of exit tactic, to secure money for investment, we may use a market order as a forex stop loss tactic. We use a trade applied with the current market rates and also use it to exit currency trades for optimal order execution. Thus, when we want to exit a trade soon, we use a market order.

To sum up, forex stop Loss orders protect against losses while trailing stops protect profits. Market orders may be a forex stop loss tool for exiting trades.