When trading forex, it?s important to use a stop loss to limit losses. A stop loss is a predetermined point at which you?ll close out your trade if the market moves against you. Many traders will move their stop loss at different points in the trade, depending on the market conditions. This is known as ?trailing? the stop loss. To do this, the trader will move their stop loss to a new level (typically a break-even point or slightly lower) once their trade has moved in a favorable direction. This helps to lock in profits and reduce risk if the market suddenly moves against them. Moving stop losses can also help to increase profits if the market continues to move in the desired direction. However, it?s important to understand the risks of moving stop losses and use this technique judiciously.
