Lesson 6: Trading Methods

Welcome to Forex lesson series. Today I will describe trading methods, loss and profit management. So people who didn't follow my previous lessons, go back and refer them well. You know that I give many benefits people who register with me. So if you didn't get that chance yet pls, Go to this link and create an account.

Stop Loss and Take Profit

Stop loss and take profit forms two important elements of trade management and is just as important as the analysis one would do before opening a position. In this article, we present a brief guide to using stop loss and take profits and also present a detailed tutorial into how to set the Stops and target levels using the MT4 trading platform.

Stop loss (SL) or stops is defined as an order that you tell or send to your broker telling them to limit the losses on an open position (or trade).

Take profit (TP) or target price is an order that you tell or send to your broker informing them to close your position or trade when the price reaches a specified price level in profit.

Why set stop loss or target profit?
The reason why traders would set a stop loss or target profit levels is to manage their trades better. Imagine trading without a stop loss, which could potentially exhaust all your equity. Likewise, imagine not trading without a target price, which would basically expose your entire account equity to the market fluctuations.

Note: When you set stop loss you should have better understand how many pip range you used compared with the take profit level. Also, this value depends on your MT4 account balance.

Long-Term Traders and Short-Term Traders

Forex traders can be categorized as long term and short term traders considering their trading style.

Long-Term trader:

Long-term traders always target high profit from each trades they open. Trading volume (the lot size) always very less than short-term trades. They no need to watch market always when they open trades and close trades (It means this method widely use buy limit and sell limit option and then set stop loss and take profit levels. ). They cannot open many numbers of trades because if the market runs the wrong way your investment will not enough to survive. Trading decisions based on H4 D1 M1 charts.

Short-Term trader:

Short-term traders always target low profit from each trades they open. But they open more trades and don't keep the trades too much time. The trader needs to watch market when the open trades. Since the trading volume (the lot size) always very high, each trade can get high profit (high volume and less pips). Stop limit is very important in this trading method. Trading decisions based on M5 M15 M30 H1 H4 charts. (This is the most famous and profitable method)

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This is ending in Lesson 6 add a comment if you have any question related to this. I hope you will get this better chance by registering under me. So, see you with Lesson 7.

Good day...!!!