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Island
How do I set up stop loss and take profit in forex trading with a difference of 3 and 6 pips respectively? Can you provide a visual guide for this?
2023-06-02 07:15
Answer list:：
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Louisa
A stop-loss order is an order placed with a broker to sell a security when it reaches a certain price point, in order to limit potential losses. It is typically set below the current market price, and once triggered, the order becomes a market order to sell the security at the best available price.
A take-profit order is an order placed with a broker to sell a security when it reaches a certain price point, in order to lock in profits. It is typically set above the current market price, and once triggered, the order becomes a market order to sell the security at the best available price.
In the given scenario, the stop-loss order is set at 3 points below the current market price, and the take-profit order is set at 6 points above the current market price. This means that if the security's price drops by 3 points, the stop-loss order will trigger and the security will be sold, limiting potential losses. On the other hand, if the price rises by 6 points, the take-profit order will trigger and the security will be sold, locking in profits.
Below is an illustrative example of how the stop-loss and take-profit orders are set:
Market Price: $50
Stop-loss Order: $47
Take-profit Order: $56
If the security's price drops to $47, the stop-loss order will trigger and the security will be sold.
If the security's price rises to $56, the take-profit order will trigger and the security will be sold.
Note: The actual placement of stop-loss and take-profit orders may vary depending on market conditions and individual trading strategies.
Release time 2023 06 02