What is Stop Loss when trade Forex on Olymp Trade? Have you ever encountered a situation that was trading well when suddenly the market reversed while you were away for only 5 minutes? Your profits suddenly plummet alarmingly. In this case, a lot of people go through, not just you. Luckily, the Olymp Trade Stop Loss feature will prevent that from happening.
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What is Olymp Trade Stop Loss?
Lower stop loss is a tool similar to the usual stop loss feature for open trades. This tool prevents the trader from taking a loss on a position with a certain amount if the asset price can go in the wrong direction.
The most significant difference in the Stop Loss compared to the regular stop loss is that it can help a trader protect the profits they have made on a good trade without having to close a position or use it depending on Choose “take profit”.
Besides, it allows traders to leave their computer or phone screens without having to worry that they will lose money if the market reverses while they are away.
How does the Stop Loss order work on Olymp Trade?
The stop loss moves along with the price of the asset you are trading, and it works for both Up (Buy) and Down (Sell) trades on the Olymp Trade platform’s Forex option.
You open a trade to increase Gold at $ 1450 an ounce with the Buy order of $ 100. You place a Stop Loss at $ 10 (10%) of the trade amount. After that, the price of the Gold started rising as you predicted it was $ 1475, but you thought it could go much higher and didn’t want to exit the trade. Your stop loss moves with an increase and will now automatically close if your position loses $ 10 from the price of $ 1475.
In this instance, the Stop Loss order helps you feel secure. If prices continue to rise, your position is safe as it remains open. Suppose Gold then reaches $ 1485, but suddenly declines and returns to $ 1450. Your Stop Loss order will sell your position at $ 1475 to maintain profit even if you cannot sit in front of the computer to observe.
It also works the same way as the Down (Sell) position.
You open a Sell position with Gold at $ 1450 with a transaction of $ 100. You place a stop loss of $ 10 on the trade. The price of Gold fell as you predicted at $ 1435, but then returned to $ 1450 while you were making a sandwich.
Your Stop Loss order will sell at $ 1445, which will preserve some profits for you despite the quick reversal of prices.
A few tips when using Stop loss below
Here are a few other things to consider when using the Stop Loss order.
Do not set the Stop Loss amount too small
If you set the lower stop loss level too small, it may close your trade even if there is only a slight fluctuation in the price of the asset. The rule is usually to set a stop loss below 10–20% of the trade amount.
Do not wait to enter your stop loss
Many investors make the mistake of waiting to set a stop loss until they are ready to leave the computer or do another job. If you have many different open positions at the same time, you can easily forget to set all the stop loss settings below.
Besides, even if you are sitting in front of a computer or phone, if you have multiple open positions in different markets, you may have difficulty when the price reversal suddenly because you are not fast enough to capture and close the position.
Always enable Stop Loss / Take Profit feature
Lastly, make sure to turn on the Stop Loss / Take Profit feature in the settings menu on the platform to take advantage of the tool.
Olymp Trade continues to provide the best professional tools and resources for its clients, and the Stop Loss is another good example.
Take advantage of lower stop orders to make more profit and minimize your losses. Wish you happy trading.