3-way Orders at Saxo Bank
Agenda • • • • •
Advantages of using 3-way orders Ratio-trading Support and Resistance levels Placing a 3-way order on your SaxoTrader 2 Example
What is a 3-way order? • Entry order (also called primary order) • Limit order (to take your profit at) • Stop Loss order (to limit your losses) Long position
Short position
What is a 3-way order? • Entry order (also called primary order) • Limit order (to take your profit at) • Stop Loss order (to limit your losses) Long position Limit to sell Entry
Stop Loss to sell
Short position
What is a 3-way order? • Entry order (also called primary order) • Limit order (to take your profit at) • Stop Loss order (to limit your losses) Long position
Short position Stop Loss to buy
Limit to sell Entry
Stop Loss to sell
Entry
Limit to buy
Advantages of using 3-way orders • Promotes trading discipline • Removes emotional impulses • Saves time
Ratio Trading
Risk-reward ratio
Reward Risk
Risk-reward ratio
Reward Risk To calculate the ratio, you need to know your: Entry Price Stop Loss Target Take Profit Target
2:1 and 3:1 Risk-Reward Ratio
1.4000
Entry Price – Buy EURUSD 1.4000 Stop Loss Target – EURUSD 1.3970 (30 pips) Profit Target – EURUSD 1.4060 (60 pips)
Entry Price – Buy EURUSD 1.4000 Stop Loss Target – EURUSD 1.3970 (30 pips) Profit Target – EURUSD 1.4090 (90 pips)
Risk/Reward Ratio – 60/30 = 2/1
Risk/Reward Ratio – 90/30 = 3/1
Entry
1.4000
Entry
2:1 and 3:1 Risk-Reward Ratio Entry Price – Buy EURUSD 1.4000 Stop Loss Target – EURUSD 1.3970 (30 pips) Profit Target – EURUSD 1.4060 (60 pips)
Entry Price – Buy EURUSD 1.4000 Stop Loss Target – EURUSD 1.3970 (30 pips) Profit Target – EURUSD 1.4090 (90 pips)
Risk/Reward Ratio – 60/30 = 2/1
Risk/Reward Ratio – 90/30 = 3/1
1.4060
Limit
1.4000
Entry
1.3970
Stop Loss
1.4000
Entry
2:1 and 3:1 Risk-Reward Ratio Entry Price – Buy EURUSD 1.4000 Stop Loss Target – EURUSD 1.3970 (30 pips) Profit Target – EURUSD 1.4060 (60 pips)
Entry Price – Buy EURUSD 1.4000 Stop Loss Target – EURUSD 1.3970 (30 pips) Profit Target – EURUSD 1.4090 (90 pips)
Risk/Reward Ratio – 60/30 = 2/1
Risk/Reward Ratio – 90/30 = 3/1
1.4090
Limit
1.4060
Limit
1.4000
Entry
1.4000
Entry
1.3970
Stop Loss
1.3970
Stop Loss
Support and Resistance Levels
Support level The price level at which the currency has historically had difficulty falling below
Support
Resistance level The price level at which the currency has historically had difficulty trading above
Resistance
A good trader knows that he will not win in every game. However, with a good risk-reward strategy, it takes only a few winners to make a very happy trader.
Placing a 3-way order on your SaxoTrader 2
To place a 3-way FX order, you need to use the Forex Orders module:
The Forex Orders module:
Entry Order
The Forex Orders module:
Entry Order
Take Profit Order
The Forex Orders module:
Entry Order
Take Profit Order
Stop Loss Order
Order Types
Sell
Buy
3-way orders can be seen, changed and cancelled in your Open Orders module:
You can see your also see your 3-way orders on a chart:
An Example
Entry
Entry
Take profit
Stop loss
Summary
• • • •
Advantages of using 3-way orders Ratio-trading Support and Resistance levels Placing a 3-way order on your SaxoTrader 2
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