Trailing Stop Loss – Another Perspective to Trade Exits Trailing stop loss is a new perspective in forex trade exits. A stop loss can be called an order to sell off a security once its price gets to a particular level, and it is usually placed with a broker. Also called a stop market order or, simply, stop order, stop loss is used to restrict the amount of loss that accrues to an investor. Trailing stop loss, in its own case, works in a more intricate manner. Based on the prevailing market conditions, trailing stop loss are shifted automatically as preset by the trader. However, the focus by most traders on the entry strategies causes them to abandon using any trailing stop loss for their trades. Forex Trading Without a Trailing Stop Loss Some traders sometimes do have the wrong belief that they are smart enough to trade without a stop loss. In the end, they would need nobody to tell them that they had taken the wrong steps in their trading decisions; the trade result would do the talking. Experience, they say, is the best teacher, but this is a case of learning the hard way. To prevent running into losses when trading, trailing stop loss is a more potent form of stop loss to use. The fact that the trailing stop loss order shifts when the order starts to make profit as the market moves makes it an effective and useful means of ensuring profit on a trade whenever the condition permits it. Whenever the market movements favor a trade position and profit is made, the trailing stop loss appreciates according to the magnitude of pips stipulated in the trailing stop rules. On the contrary, should the market go in undesired direction, the stop loss will remains at the point where it last trailed, and should the market price hit the stop loss, it will exit the trade automatically.
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