I am a newbie on forex just started trading on practice account with forex.com ,my question are the following :
1.) How can i place a STOP LOSS ORDER on a BUY Trade ? i understand that i have to place the STOP LOSS very high to enable me buy low when this is done, how can i buy it low if the market goes more down to what i wanted to buy it? do i need to place a different LIMIT ORDER to then buy low at the lower price while the BUY STOP LOSS ORDER is still in place? And how many pips or where in the trend is best to set a STOP LOSS ORDER for a buy trade ? please can someone explain to me better how this works and how its done.
2.) How can i place a STOP LOSS ORDER on a SELL Trade ? Now if i am not wrong i also understand that the STOP LOSS on a sell trade should be place low. how low can it be placed so that one dont loss more than what the trade was bought for ? where is the best place in the trend to place a SELL STOP LOSS ORDER ? OR how many pips is best or fair to risk ?
3.) About TRAILLING STOP : how is this best placed? and how can i exit a trade place with trailling stop if i wanted to close my trade for the day and secure my profit ? and is it possible to modify a trade or position when placed on trailling stop? what is the best pips to place on trailling stop to avoid it from stopping out ?
Hope to get help and more clearification with this ,i will appreciate it alot cos they are very confusing to me.
Your questions are a little hard to answer you probably need to read the help files in your trading software you didnt say which trading software you are using though.
If you open a regular buy order you place the stop loss at the same time or after you have opened the position. You can modify the order after you have opened it to place a stop loss or change the original stop loss. You set the stop loss at a lower price than you set the order so if the price falls the stop loss will prevent you losing too much money
If you want to open an order should the price should reach a specific level later, you set a buy limit order, this order wont execute unless the price reaches the level you set.
You set the stop loss at the same time as you set the order so the stop loss does not activate untill the order is live.
While the order is still pending the stop loss is also still pending.
when it is a sell trade you set the stop loss higher than the price at which you open the trade, you can change the stop loss level at any time by modifying the order
A trailing stop is best placed when your order is in profit, if you set a trailing stop at 40 pips your order will continue to make profit untill the price reverses, then your order will lose some of its profit while the price is reversing but if it reverses 40 pips your trailing stop will exit the order,