Trailing Stop Loss

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ForexTrailer.com
Trailing Stop Loss Another Perspective to
Trade Exits
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A stop loss is used to restrict the amount of
loss that accrues to an investor. 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.
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Forex Trading Without a Trailing Stop Loss
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Some traders believe that they are smart enough
to trade without a stop loss. In the end, they
would realize that they had taken the wrong steps
in their trading decisions the trade result
would show that. 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.
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The fact that the trailing stop loss order shifts
when the order starts to make profit makes it an
effective 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 remains at the point
where it last trailed, where if the market price
hit the stop loss, it will exit the trade
automatically.
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Trailing Stop Loss Example
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Suppose a trader buys EUR/USD at 1.3000, and he
placed his stop at 1.2800. Let us say that the
market price appreciated by 100 points. Should
the trader shift his stop loss to the breakeven
point, the profits realized would serve as the
risk of trading, and he would be able to ride the
profits if there is to be further upward
movements.
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Trailing Stop Loss Protect Your Forex Profits
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As long as the market movements favor a trader
and generate profit, there will be a continuous
shift of the trailing stop loss to lock in
profits as specified levels are attained by the
market price. The trailing stop loss also
regulate the extent of loss should there be a
downturn in the market trend.
Survival in the Forex market is somehow tied to
how well a trader makes use of the trailing stop
loss.
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