The Unique Stop Loss and Take Profit
Stop loss and take profit is a very important aspect of trading and investing in any Financial Market. We get several people who ask, especially beginners in Forex, how to calculate the right stop loss and take profit? The answer to this question depends on the individual who is trading. We do provide a general stop loss and take profit but in actuality each case is unique within itself and is dependent on the individual trader's personal risk appetite as an investor, the amount of money they're investing with and the financial goal(s) they're attempting to achieve. For example one person may have $1,000 in their trading account and they may consider themselves to be a high-risk investor. Since consider themselves to be a high-risk investor they don't mind having each pip valued at $10 per pip. $10 per pip can easily wipe out $1,000 if the trade is not going in the right direction or if the instrument encounters unforeseen extreme market volatility. This may seem like a very extreme approach for most traders but you have some people out there who consider themselves high-risk investors and they do not mind taking these types of risks. On the other hand you may have another individual who has $1,000 in their Forex trading account but they consider themselves to be a moderate risk investor. This individual decides to have each pip valued at $1 per pip. They place a stop loss of - $300 . This means that they give their account much more room to breathe and fluctuate throughout any type of Market scenario. The moderate risk trader has a higher probability of success then the high-risk trader in this specific scenario. Every trade must take into account the individuals risk appetite and their understanding of which direction they want their investment to go. I go over these Concepts in our eBook Easy Forex Trading, so that everyone can have a better understanding about the type of investor they desire to become. There are three categories of investors:
High risk investors
Moderate risk investors
Low risk investors
Easy Calculation Tools In the stop loss and take profit tutorial, I go over the tools that you will need to use in order to make your trading and investing a lot easier. I have also placed an image that can help you clearly understand the unit value to lot size value and the PIP value as well. These concepts can be a little confusing especially if you are new to the Forex Market but I do my best to explain it as clearly as possible. I also go over the tools that you will need when trading in the Forex Market. These tools can also help you calculate your trades in accordance to the amount of money that you have in your trading account.
The first tool that you will need is MetaTrader 4. MetaTrader 4 is a trading platform that allows you to execute trades in the Forex Market. The other tool that you will need is Oanda's Fx Trade calculator. Both of these tools will help you determine how many lot sizes or how many units will work out according to your current investment position. I encourage you to learn more about our highly successful long-term trading approach. I highly encourage you to watch the stop-loss take profit video until you get a completely full understanding of the concept I discuss in the tutorial even if it means that you have to watch the video over several times again. I want you to become fully familiarized with how to calculate your stop loss and take profit in accordance to our long-term investing strategy. If you have any questions feel free to contact us via WhatsApp at 424-244-9665.