Learn How to take a Profit Before You Lose Everything in a Forex Trade
If you have ever looked at a forex trade that you have made and watched the value go down and wished that you hadn’t made the trade, you can at least stop it. It is referred to as a stop loss so that you can take profit with what you have left so that you lose less of your trading capital. This is a very easy thing for you to do and it’s important to know about the option any time you are trading.
Understand Forex Trading
When you are involved in Forex trading, you are focused on how one currency goes against another. For example, when you have XAU/USD, you are trading on how gold compares against the US Dollar. The trade that you make is based upon the movement of pips. If you say that gold is going to be better than the US Dollar within a certain time frame, you take profit based upon the movement of pips. The higher it is above the US Dollar, the more money that you make.
The goal is always to be in the money, but this does not always work. If you are going to be online gold forex trading, you want to try and be in the money whenever possible. One way to do this is knowing about forex trading and the stop loss. The stop loss is a vital tool that can help you recoup some of your losses.
Keep Track of Movement
Movement needs to be tracked in one way or another. The cost of gold and even the US Dollar can fluctuate dramatically throughout the day, week and month. If you are not tracking the movement, you have no idea whether you are going to profit or loss at the end of your order.
By watching the movements in real time and getting signals, you can know whether it is a good idea to place a stop loss so that you don’t watch all of your money disappear. If you are going to get involved with online gold forex trading, you need to be responsible and know about your options so you don’t lose money when it’s not necessary.
Manage Your Portfolio
It is critical that you manage your portfolio so that you know what’s going on with the currencies. Once you set up a trade, you have a limited amount of time for the pip to travel in the direction that you traded in. If you see it going in the opposite direction, you have the ability to act on it.
A stop loss can only be used if you are managing your portfolio. If you have gotten in the habit of setting up your trades and then walking away, you could be experiencing more losses because you are not managing the movement. You don’t have to lose the entire amount of money that you traded. You could cancel the trade with a stop loss to be able to realize some of your money back.
A stop loss is not always the best solution. Especially when you make a forex trade for an extended period of time, such as for a week or a month, a lot can happen within that time. You could establish a stop to cancel the order and then learn that the next day, gold skyrockets. Had you stayed within the trade, you could have profited considerably. This is just another reason to manage your portfolio in regards to movement.
Setting up a Stop Loss
It is important that you know how to set stops on your Forex trades. These can be done in advance similar to how you would set up an order to buy or sell a stock when a certain dollar amount is reached. This would allow you to manage your trades without sitting in front of the computer.
If you notice that the cost of gold is going lower than you anticipated during the day, you can also log in to your online account immediately and place a stop loss at that moment in time. That will close and cancel your trade based upon the current market value. Depending on the value at the time that you initiated the trade, you may be able to take profit of some level or you can reduce the amount that you would have otherwise lost.
Not all forms of investments and trades give you an out when you want it. Some make you wait until the time is up so that you can assume your profit or loss. Learning how to set a stop loss is a feature that is found within forex trading that can help you significantly. While it’s a feature that you can use, you have to stay on top of the trades that you are making so you know when one needs to be established so that you can minimize your losses when gold or any other commodity that you are trading takes a turn for the worse.
How to Trade Gold Online
The Price of gold is constantly on the move. Take advantage of the daily price changes in gold with an online trading account. Some brokers offer bonuses of up to 30% on your first deposit (Terms and conditions apply). Open Gold Trading Account Here
The broker trading platform will also provide you with numerous charting tools and the ability to trade other commodities and currencies in addition to gold CFD’s. You might also want to begin trading with a demo account before attempting to risk any of your own money. That way you can practice trading with virtual money on the demo platform first.