The Forex market can literally enrich in a short amount of time, maybe, vice versa, completely deprive the trade deposit. Therefore each trader мечтает о том, to earn as much as possible and lose as little as possible. To make this dream come true, it is imperative to follow the rules of capital and risk management.
One of the rules of money and risk management says: when opening trades, it is imperative to place protective stop loss and take profit orders. Usually, with a stop loss order (ограничение убытков), все понятно, and here is the take profit order (profit limitation), causes those, who recently came to the Forex market a lot of questions. Novice traders are perplexed, who may need to limit profits?
Still, the take profit protective order is also important., how to stop loss. A simple example: the trader made a purchase on the EUR / USD currency pair at the rate 1,3500. After some time, the course moved to the level 1,3650, and then returned to the mark again 1,3500. In this situation, the trader lost 150 points of profit.
Take profit protects from such losses. If a trader would use it, then he would have received the indicated 150 points with limitation, exhibited at the level 1,3650.
Every trader should remember, that the Forex market is very mobile, and even if the foreign exchange player managed to enter the market correctly, then the price will not move in one direction all the time, sooner or later she will turn around: will change its trend or to correct.
Besides, take profit serves as protection against unplanned losses, the reasons for which may be non-trading risks, for example, disconnection with the Internet or power outage during currency trading. More information about this can be found in the articles, which publishes Alpari on the official website. The fact, what is the take profit, same as stop loss, does not work on the trader's trading terminal, and on the broker's server. That's why, by setting these protective orders, you can safely turn off your computer and be sure, that at the right moment they will certainly work.
It is important to correctly determine the value of the protective order, that is, the profit margin, what a Forex player wants to have. Quite natural, what everyone wants, to maximize his profit. However, if too high a value is specified, it's very likely, that take profit may never work.
When determining the level of placing an order, we must strive to predict all fluctuations and the speed of the trend, analyze the magnitude of its rollback. Only then can you choose the right entry point and open a position.
Setting the take profit value, do not forget about the size of the spread, since when calculating the operation for profit, this value will be deducted.
Set a profit limit for a Buy position (purchase) should be higher than the opening price. For instance, to buy on the EUR / USD pair by opening a position at the mark 1,3500, you can place an order, for example, at the mark 1,3550. In this case, through 50 points, the deal will automatically close and the Forex market player will receive his profit.
For a Sell position (sale) the limit should be set below the opening price. That is, when buying on the EUR / USD pair, if the position is opened at the level 1,3500, take profit can be set at the level 1,3450. Then through 50 pips the deal will be closed with a profit.
If the level is set, and the price has reached, you need to let the position close, to lock in profits. The income received must be recorded without fail., as the Forex market is changeable. Otherwise, all the money received may disappear., and the trader will not wait for big profits from this transaction.
