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    Utilizing Stop Loss Order

    A stop-loss is an order linked to a specific position for the purpose of closing that position and preventing the position from accruing additional losses. A stop-loss order placed on a buy (or long) position is a stop-loss order to sell and close that position. A stop-loss order placed on a sell (or short) position is a stop-loss order to buy and close that position. A stop-loss order remains in effect until the position is liquidated or the client cancels the stop-loss order. As an example, if an investor is long (buy) USD at 117.27 they might wish to put in a stop-loss order to Sell at 116.49, which would limit the loss on the position to the difference between the two rates (117.27-116.49) should the dollar depreciate below 116.49. A stop-loss would not be executed and the position would remain open until the market trades at the stop-loss level. Stop-loss orders are an essential tool for controlling your risk in Forex currency trading.