Order types
Description
The use of orders means that downside losses can be minimised and profits can be locked in if markets move the wrong way.
Regular stop orders are designed to help protect investments against adverse market moves. Stop orders can be placed along with positions on all instruments for disciplined trading and to limit the risk for excessive losses. This means that investors can leave their trading platform feeling that they have taken measures to limit losses should the market move against them in their absence.
Order types
- Stop losses allow for life's eventualities - even the good ones, such as vacations and days off. If one doesn't have access to a computer or the internet or simply doesn't want to keep a vigilant eye on the markets all day, stop losses allow an extra level of relaxation in knowing that at least the downside of one's trades are somewhat protected.
- Trailing Stops are the lesser-known, lesser-used option. They allow investors to set a pip distance, so if the current price should fall by that number of pips, the position will automatically be sold. If the current price should rise, however, the percentage level is then calculated from the new highest value. Trailing stops can therefore prove an excellent possibility for minimising loss or potentially locking in profits should the markets move against investment positions.
Both regular stop orders and trailing stops are available to ActivoTrade clients on all trading platforms. Depending on the asset class traded, a variety of stop instruments can be used to match the kind of risk limitations investor's seek.
Most traders cannot be available 100% of the time. A general stop allows them to sleep more soundly and can be an effective way to protect capital and limit risk. It is also a nice way to limit oneself from intraday price volatility.
