How to Preserve Your Profit in Global Forex

To preserve your profits in global market you have to learn on how to use stop and trailing stops. Step by step guide on how to use these two methods.

Trailing stops: A trailing stop is one that is adjusted to follow a trade in the direction of a profit, attempting to keep a particular distance without being backed away from holding a profit.

Explanation: If we are long, a trailing stop would follow the price up as the price move up but would not be lowered if the price dropped. In global forex, you need to manually adjust your trailing stop as your price moves in your desired directions.

In each every trade, your first goal is to move your initial stop loss to breakeven. This ensures a risk – free trade. In a slow time fame, I keep my trailing stop quite wide, as I don’t want to be stopped out too soon, in a faster timeframe, I keep my trailing stop tighter. In most cases, I’ll keep adjusting my trailing stop every 15 – 25 pips, as the price moves in my desired directions.

After your breakeven goal is reached, you can then keep adjusting your stop loss every 15 – 25 pips, to lock in more profits, until you either decide to exit the trade with your captures intended profit, or until you get stopped out.

If you are not day trading, which means you are not watching the market very closely, and you are position or swing trading, you need to be willing to bet your trade have more breathing room without the possibility of being stopped out too easily, in this case, an initial stop of up to 40 pips is more realistic. But, according to your margin usage, you need to be willing to take this kind of hit to your account if you get stopped out. If you can’t stomach the loss of 40 pips in a given trade, either decrease your margin usage or tighten your initial stop. It’s always better, in my opinion, to decrease your margin usage.

In a 5 minute time frame, if using the slower moving averages, your stop loss should be about 20 – 30 pips. When using faster moving averages, your stop loss should be tighter, between 20 – 25 pips.

In conclusion never set your initial stop at less than 10 pips and a 10 pips trailing stop is only for use with the faster moving averages that we teach and only when well into profit.