How to work with orders in the trading terminal? Learning to put Stop Loss, Take Profit, Trailing Stop and transfer the deal to breakeven

How to work with orders in the trading terminal? Learning to put Stop Loss, Take Profit, Trailing Stop and transfer the deal to breakeven
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So, the most important thing in trading is not to mix up orders and calculate everything exactly so that it doesn’t happen that you open a deal in the wrong direction or set a loss limit in a completely different place.

In this article, we will consider in detail the entire functionality of orders in trading MT4 and MT5 terminals. These are very similar two terminals, it’s just that MT5 has a little more functions and a much higher speed of work, those who are used to and have been trading for a long time mainly use MT4, beginners can safely connect to MT5.

So let's go!

To begin with, let's analyze what is Stop Loss, Take Profit, Trailing Stop and transfer of transactions to breakeven?

Stop Loss: definition and installation rules

stop loss - this is a limiter of possible losses, the value is set both when placing an order in the terminal, so it can be modified and then changed to any other acceptable price value.

According to the rules, stop loss must be set at least for the nearest Minimum/Maximum.

Highs and Lows (also called Hi/Loy or high/low in English) can be easily determined by eye, no special indicators are needed for this.

It is only important to distinguish the highs and lows of the current timeframes from the lower and higher ones, so as not to place a stop too far or too close.

If you place a stop too close to the opening price, then with a greater degree of probability, or rather in 95% cases, it will be hit. Again, if you put stops too far, then you can get unreasonably large losses, what to do?

There is a way out!

You need to focus only on those transactions in which the stop will be as small as possible. Again, it all depends on the TF, the trading pair and your deposit.

For example, when trading in gold, you need a large deposit and stops there, you will have at least 200 points. If you trade currency pairs, then it is quite possible to get by with a stop of 30-50 points when trading on an hourly or 30-minute chart.

Of course, when switching to higher timeframes, the lows and highs will increase in distance, which means you will need to make more stops or trade on smaller timeframes.

But it's not all bad here either. Even if, for example, you have found good signals on the older timeframe, in order not to set too large stop loss, you can switch to the younger chart and find a better entry point there with a very small stop loss.

In general, understood :) It is important to initially understand at the beginning with the choice of your trading tactics and the strategy by which you decide to trade.

Trading tactics are: time to trade, which type is preferable (short-term, medium-term or long-term), trading instrument, risks per trade.

A strategy is: your trading rules for entering and exiting a trade, which is no longer dependent on your instrument and trading style.

Therefore, you still need to look for the strategy that will suit your trading style.

If you are still a beginner, then you can simply open a demo or cent account at 10$ to practice and understand which trading method is more preferable for you.

And now let's move on to calculating Take Profit!

Take Profit: how to calculate exit from a position

take profit it is necessary to calculate exactly for each transaction, it is wrong to make it fixed, since in each transaction it will be different, depending on market conditions. By the way, the same applies to stop loss, in each transaction these parameters will be individual.

So what is Take Profit? In simple terms, this is fixing your profit on an open order. You can pre-set the closing price of the order at a certain price.

Usually take profit is always fixed at some strong levels. With a deal on Buy, we are looking for the nearest strong resistance level, with deals on Sell, we are looking for support levels, respectively.

It doesn’t make much sense to guess whether the price will break through it or not, it’s easier to fix it, and only then, if a good signal appears again, re-enter the deal again, it will be much more correct.

But of course there are exceptions, when, for example, the level is very close to the opening price, in such cases, beginners are generally advised not to open positions. It’s just that here you need to study the history and watch, since the price is more likely to break through it, and there you already need to look at the nature of the breakout.

If it is strong (impulsive candle), then the price can take far and capture the next levels, the profit on such transactions is very tangible.

If the price stops near the level, but does not move sharply in the opposite direction, then you may need to wait, so it is corrected in order to break through the level from the next acceleration. if the price moves in the opposite direction with an impulse, then it is better to wait for a rollback to this level again and fix the deal.

What does it mean to move a trade to breakeven?

As for moving a trade to breakeven, this is generally a subtle thing and you need to use it when you understand exactly what you are doing and you have it included in your trading methodology.

Moving a trade to breakeven means moving your stop loss OUTSIDE the order opening price. If you have a Buy order, then the stop is moved Above this price, if Sell, then we move it Below.

The very calculation of the breakeven level (the distance from the opening price to the take profit) is necessary

Because here 50/50, if you didn’t correctly move the deal to breakeven, it will close on this stop and go further towards the expected take profit.

What is trailing stop?

Trailing Stop - otherwise called "Floating Stop Loss", it can be set in the terminal. It is mainly used in automated trading to minimize the risks received during trading advisors.

The thing is useful in the sense that when you do not set a take profit, but set a “trail” stop (trailing stop), for example, by 15 points. What does it mean? This means that as soon as the price passes every 15 pips, your stop will follow it by the same distance, and so on until the trade is stopped out.

It is important to understand that Stop Loss in this way will start moving based on the opening price, and not from the actual place of the original stop!

Here's what it looks like visually:

What to choose: Fixed trailing or Thrall - depends on the trading technique, but you can test both. Just take profit is set when at least on 90% there is confidence that the price should definitely reach some price mark, but you don’t know when this will happen.

That is, the price can move up and down, and eventually reach the target. And if you set a trail, then the trade can be closed simply on a random correction and also move towards the alleged take.

You also need to take into account that the trailing stop works only when the terminal is turned on or it can be set on a special VPS server.

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