XI.8. Setting stop commands and take profits.

Stop loss orders and take profit orders should be set according to your risk management.

Stops placed close to the current price are triggered frequently. A stop is very reasonable, allowing you to save 50% of the earned profit.

If volatility leads to a sharp drop, followed by a recovery, then a stop exit is not the best option.

You can trade without stop losses, reducing the size of the position as the price moves against you. Higher volatility means less position.

Trading strategies can be divided into the following groups:

– hard stop orders. Setting stops once and waiting until they are triggered;

– sliding stop orders. Using take profit or manually moving the stop behind the price. After reaching the target price, the price can continue climbing up. So why miss out on profits?; – work without stops, reducing positions. In fact, in the opposite direction of the price movement, you put the same stops, only with the right number of lots to reduce the position. This strategy is good for large positions when it is quite expensive to exit at once.

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