I’m totally lost on what stop loss and take profit is…ive looked around and still havent found a good answer.
Can someone tell me what it really means and how it’s calculated? How should I use it when putting in an order?
Thanks.
[B]Stop Loss[/B] = Order placed to get you out of a trade that goes against you to guard against runaway losses. This is normally a “stop” order.
[B]Take Profit[/B] = Order placed to exit a trade once it’s reached the price objective you have for the position. This is normally a “limit” order.
would there be a good way to calculate both? Should I calculate both based on a average pip range of 20? 30?
When I place an order and I enter the stop loss, does it have to be below the price or can it be above the price?
I’m guessing the take profit would be positive by x amount of pips?
Stops and targets should be determined by your trading strategy, not just some made up number. Test, test, test.
As for when you place a stop - if you are long then the sell stop should be below the current market price, while if you’re short then the buy stop must be above the current market price.