Risk Management Tools – Stop Orders

Responsible trading requires discipline. It is impossible for any trader to have the correct market views all the time. Trading will certainly entail losses. Therefore, give yourself an amount you are prepared to lose, or you can afford to lose. And set a stop loss order on the level which will hit your prepared loss amount.

Remember, it takes lots of discipline to do this, as most investors will tend to hold to their positions, or amend their stop orders further and further away from their initial Stop level, even when it is obvious market trend is against them.

Stop Order to initiate position
Stop orders are not only for risk management. Some traders use stop orders to initiate position as well. For example, some traders identify that the resistance for USD/JPY is at 118.00, and they are only willing to buy USD/JPY if it breaks above 118.00. So they can use a stop order, to buy USD/JPY at 118.10.

Ask our Dealers about Market Strategy

In the dynamic market of Forex, it can be useful to obtain opinions of dealers that are monitoring the market full time. As a client of Phillip Futures, you can check with our dealers, if your trading strategy is in line with the market, or are you actually going against the trend, through the phone