Congratulations for making it to the end of our forex trading course. Now it’s time for you to get out there and put everything you have learned into practice. If it is your first time trading then we would definitely recommend starting with a demo account before using live funds.

Remember, stick to your plan, trade with discipline and keep your trades as objective as possible and you will be well on your way to success. Good luck!

“Don’t ever make the mistake of believing that market success has to come to you fast. Trade small, stay in the game, persist, and eventually, you’ll reach a satisfying level of proficiency.”


In order to trade on the forex markets you need to have an account with a broker. A simple Google search will bring up hundreds of different brokerages all fighting for your custom, but to be honest it is a bit of a minefield.

It can be confusing and overwhelming for newbie traders to pick a brokerage, but don’t worry, we have gone ahead and picked out one of the best for you.

Our personal brokerage recommendation – NAGA

Why Naga?

Naga is a fantastic broker that offers over 500+ tradable asset classes including, forex, stocks, commodities and even cryptocurrencies.

Of course, we recommend sticking to forex trading but if you do like to trade any other assets then you have the added convenience of keeping it all with the same broker.

On top of that, the platform is extremely friendly to inexperienced and newbie traders. There is no minimum deposit required and they offer a wide range of deposit and withdrawal options, unlike some of their competitors.

They have a top notch customer support team and are fully regulated so you can be sure that your funds are safe.

Here is a list of the key benefits you can expect from signing up with NAGA as your broker.

  • Ultra low fees
  • No minimum deposit
  • Multi-currency accounts
  • Great customer support
  • NAGA Mastercard
  • Regulated by CySEC
  • Copy trading (copy top traders positions automatically)
  • Educational content to help you with the platform and other basics that you may need help with.
  • Fully supported DEMO account available.

How to set it up

The best and easiest way to start trading with NAGA is to download MT4 directly from their website. NAGA will already be connected which means you don’t have to mess around connecting the broker yourself.

Download MT4 directly from NAGA here –

If you already have MT4 set up then you can register for a NAGA account here:

MetaTrader 4

Metatrader 4 is a massively popular trading software that you can download and use for free.

It’s a fantastic tool that forex traders can use to view real time price movements, open and close positions, view and edit charts and graphs, and access all of the technical indicators that we have mentioned throughout this course.

In the past it was solely for the use of forex trading, but now you can trade futures, equities, CFD’s, and more, all using this one platform.

It’s a great one stop shop for everything you need when you trade, so we highly recommend that you download it. It’s extremely user friendly and it offers a massive range of currency pairs – way more than you would ever need access to.

How to set it up

Okay, so let’s run through the steps that you need to take to get started.

Step 1: Download Metrader 4 (MT4.exe) – You can download it from

NOTE: You can download MT4 for PC, iPhone, iPad & Android

Step 2: Open an account with MT4. Here you can decide if you want to use a live account or a demo account. If this is your first time trading then it is recommended that you start with a demo account to get to grips with things before going live.

Registering with MT4 will require that you upload some identification documents, so make sure you have those to hand.

Make a note of your account details, username and password for future reference,

Step 3: Now you need to link your broker account to MetaTrader 4. To do this, simply log in to your brokerage account from the MT4 interface.

NOTE: For those of you that don’t have a broker yet then check out or next section for our personal recommendation and how to get set up.

How to open a trade

Alright, now that we have our account set up with MT4 and our broker is linked to the software we need to learn how to open a trade.

Firstly, select the currency pair of your choice by clicking on the “Window” tab that you can find at the top of the interface.

Select the currency pair by clicking on the ‘Window’ tab at the top of the MT4 platform, and then select ‘New Window’. All of the main currency pairs that you should be trading are there.

You can then click ‘New Order’ on the MT4 toolbar or press F9 to open an ‘Order’ window.

The screenshot below displays the ‘Order’ window for the EUR/USD currency pair. From here it is a relatively straightforward process. Simply enter the trade size that you wish to open your position with and then choose either “Buy by Market” or “Sell by Market”.

Doing this type of order will automatically fill the order based on the current market price. While it’s okay to do this sometimes, it’s far better to enter a “limit” trade and choose your entry spot carefully with the technical analysis that you conducted.

To do this, open the drop down list by clicking on “type” and select “pending order”. Here you can set up a buy or a sell at specific price points in the market.

Set take profit & stop loss order

When you place your order you will be presented with the option to enter the price point for your take profit and stop loss orders. It is very important that you know these areas before you trade.

If you have followed our course properly then you will know the importance of discipline and trading consistently using the correct RRR. This is the point where the theory turns into practice.

Every time you open a position, make sure you have at least a stop-loss order placed at the same time. This will ensure that your trading account is safe from any flash crashes or big market swings while you are in your position.

You can enter your take profit and stop loss orders manually into the field or you can use the arrows to automatically populate it with the current market prices.

Economic Indicators

When you’re out there conducting your fundamental analysis and researching the latest developments on the markets you are going to come across a lot of economic indicators. GDP, CPI, employment rates, etc, etc.

It’s all well and good finding this information, but what does it really mean and how does it impact the value of a currency?

In this section, we will break down the main economic indicators that you will come across and discuss what each of them signifies and how the markets will typically react to them.

Gross Domestic Product GDP

Let’s start with one of the big ones, GDP. Unless you have been hiding under a rock or you have never watched a news channel before, you will most likely have heard of GDP before.

Gross Domestic Product is the widest measure of the overall health of an economy. It is a way to measure the market value of a country’s goods and services. Because of this, it is used to determine how well or how poorly the country is performing economically.

It’s such an important indicator that this is what economists use to determine what stage of the business cycle we are currently in. If we see two consecutive months of negative GDP, this is what we call a recession. As soon as we enter a positive month the depression is considered to be over.

This is a good indication of the current sentiment around a currency. If the country’s economy is in a recession then there will be a higher likelihood that the value of that currency will fall. Something to keep in mind.

Note: It takes a long time to compile the data that goes into the GDP calculations. By the time the data is released most of the information is already known, so usually, it has little to no impact on the market. However, if the GDP figure is far from what is expected then it can certainly cause chaos in the market.

Non-farm payroll

Non-farm payroll, or NFP, is a key economic indicator for the United States economy. As the USD is by far the most traded currency in the world, chances are you will be trading using it at some point in the future.

NFP  is intended to signify the total number of paid workers in the U.S. excluding farm employees, government employees, private household employees and employees of nonprofit organizations.

It is one of the most significant economic indicators for the U.S. economy and the fluctuations in the market prove that.

It is normally released on the first Friday of every month at 8:30 am EST. You will definitely want to keep an eye on that date. Even in the days before the figure is released the market becomes particularly volatile in anticipation of the release as there are thousands of traders trying to second guess the market.

There will be a general expectation as to what the figure will be, but of course, this expectation is not always correct.

The higher the payroll number the better for the U.S. economy. This is definitely one to keep an eye out for, but be warned, the markets can get extremely volatile in these moments.

Consumer Price Index

The consumer price index, or CPI, measures the costs of goods and services by calculating the average price of a specific basket of goods or a service.

When the CPI changes this is a reflection of the rate of inflation which is a very important figure when it comes to currency trading.

It gives us an objective view of how quickly prices are rising or falling in the economy. This number is also released monthly in the United States and in the UK, so you need to keep an eye on these dates.

This metric is used to determine if the economy is on track with the projected inflation rates. If they are then this is good for the economy and will usually attract investment, if not then the currency may weaken.

Employment Indicators

Employment is one of the key indicators that signify the strength of a country’s economy and how well the government’s policies are performing.

There are a number of indicators you can follow to get employment statistics, one of the most significant is the NFP.

There is an Employment Monthly Report that is released once a month that displays the employment rate and the unemployment rate (given as a percentage of the total labour force).

The lower the unemployment rate the better it is for the country’s economy.

Interest Rates & Central Bank meeting

Any change in the interest rates is typically met with a huge reaction in the forex markets. These rate changes affect everybody and everything surrounding the currency; the buyers, sellers, importers and exporters.

The Central Bank of a lot of the major forex currencies has regular meetups each month to discuss the current state of the economy. Sometimes the bak can make drastic decisions such as altering exchange rates or implementing quantitative easing strategies.

These are huge events in the forex world and the markets will usually wait in anticipation during each of these regular meetings. Unless you have some key insider information, it’s best to be cautious and avoid trading around these periods.

Retail Sales

Retail sales measure exactly how much consumers are spending in stores that sell goods. It counts all the receipts from our high street spending, grocery store visits, DIY trips, you name it.

This gives a great insight into how consumers are behaving and essentially how the economy is performing. If consumers stop spending money, the economy will stop working. Money makes the world go around, after all.

Retail sales figures are crucial indicators to the strength of the economy because if the consumers are spending, it means the profits of companies will be up and share prices will follow. This will attract investment and usually gives a boost to the country’s currency.

Fundamental analysis

As we mentioned previously, fundamental analysis is an approach to analysing the market by looking into the social, economic, and political issues that may affect a country and its currency.

These are all vital components that drastically influence the supply and demand of the currency, so it is worth keeping an eye on them for the periods that you’re trading.

Fundamental analysis vs technical analysis

The main style of analysis that we have covered in this course has been technical. This is the use of indicators, oscillators, as well as the analysis of price action and candlestick reading.

While this is great for short/medium term trading, fundamental factors will always have the biggest effect on the markets.

Truth be told, most traders ignore the fundamentals of the currencies that they are trading. The general argument is that they do not need to concern themselves with macroeconomics while they are trading the smaller time frames.

While there is certainly some logic to this, it is a flawed and naive outlook. The more knowledge we have and the better understanding we have of the markets, the better.

Fundamental analysis can help us to identify potentially turbulent times in the market, shifts in sentiment, and times of great uncertainty – all of which are situations we would be better off watching from the sidelines.

Trading using technical analysis alone is kind of like trading with one eye open. Eventually, you will miss something and run into an unpleasant surprise.

After all, the support and resistance lines you draw on your chart are no match for a central bank adjusting its interest rate or a shock referendum result (ahem, Brexit).

Economic calendar

So how do you keep up with all of these events? Well, the good news is that you don’t need to be an Oxford certified economist. After all, this is “fundamental analysis” not expert, in-depth analysis.

You can simply follow an economic calendar to keep an eye on all of the key dates and important events that happen in the forex world.

An economic calendar is one of the most important tools for traders who wish to keep an eye of the market fundamentals. It essentially lists all of the major economic events that occur across the globe in one easy to read format.

Rather than trolling through all of the news sources yourself and creating your own diary, you can simply take a look at an economic calendar and see all of the important upcoming events for the currency pair you’re trading.

Some of the things that a good economic calendar will list are:

  • Interest rate changes
  • Central bank announcements
  • Political elections
  • Economic indicators (GDP, CPI, employment rates etc.)
  • Company quarterly earnings reports
  • Key speech dates

This is a massive time saver. It brings together all of the information you need in one place. With some economic calendars, you can even filter the results to display the exact event you are looking for. Very handy.

Tip: Even with the use of an economic calendar it is still better to stick to one or two currency pairs when you first start out. It’s easy to get overwhelmed and fall into a state of analysis paralysis. Save yourself the hassle and knuckle down on one pair and become a master of that before you move on.

News sources

If you really want to get your teeth stuck into the fundamental analysis by keeping your ear to the ground on the latest of the forex markets then you will need to find a good news source.

Market news and data are available through many sources, you won’t be hard-pressed to find the information. If you prefer to use the TV to get your news then you will likely find some around the clock coverage on the markets.

Other than that, the internet is your best bet. Stick to the larger and more reputable sources for the most reliable information. Here are some examples of good sources for forex news.

  • Bloomberg
  • Reuters
  • The Wall Street Journal
  • UK Investing

Risk vs reward

What is risk vs reward ratio?

If you have spent some time trading before or if you have studied other traders then you will likely have come across the term “risk reward ratio”. This is a crucial aspect of trading that we must understand if we are to become profitable in the long run.

The risk reward ratio is simply the amount of capital that we are risking for the potential gain that we are targeting.

How to calculate R-R-R

Whenever we want to enter a trade we should calculate our risk/reward ratio first. All we need to have is our entry price, stop loss price, and our target price.

Example one

For the sake of simplicity, let’s use round numbers to explain how this works.

Let’s say we are going long on a currency with an entry price of $100.


First we need to ask, how much would we lose if we lost our trade:


Next, how much would we profit if our trade won? From this we can work out what our risk/reward ratio is 60/20 = 3:1. In this example our reward is three times the size of the risk.

Now let’s use an example using pips. Let’s say we are entering a scalping position trying to make a 10 pip gain and we set our stop loss at five pips.

In this case we stand to lose five pips if our trade loses and we win 10 pips if our trade wins.

10/5 = 2:1

In this example, our risk to reward ratio for the scalp would be 2:1.

Easy enough, right? But what does this mean and how can it help with our trading?

Why is risk vs reward important?

When we know what risk reward ratio we will be trading with we can easily find out what winning percentage we need in order to be profitable traders. This is very handy to know as you can always stop and take stock of how you are performing and just how far away you are from becoming a winning trader.

Let’s take a look at what we would need to do to break even if we trade at some different risk to reward ratio.


The problem with too high a RRR

As you can see, the required winning rate drastically reduces as we increase our risk to reward ratio.

Sometimes when newbie traders see this, their eyes light up with the sight of the low winning rates, and they think that it would be easy to attain these levels and instantly become a winning trader. While there is some logic to be found in this, there are a few drawbacks that we need to consider.

Firstly, the higher we go with the RRR, the longer our trades will last, and the more exposure we have to the market. As we have mentioned many times throughout this unit, trading is mostly a mental game.

The longer we expose ourselves to the market, and the longer we have open positions, then the more chance there is that our emotions will get the better of us and interfere without trading.

Secondly, if we have a long RRR, we will get stopped out more often than not, and we will have to overcome dealing with many consecutive losses, which can be a tough burden for even the most seasoned of traders.

Lastly, traders will often cut their trades short when they are in these types of trades and will take their profit early. While at first, this may seem like a bad idea, but what they are actually doing is dooming themselves to being massively unprofitable.


If they cut their winning trades short every time, they will not be reaching that four, five, or six times target that they were aiming for.

That means that they will not be making up for all of those small losses that they have racked up, and they will often never reach the high targets that they set.

Note: It is entirely possible to be a winning trader using high risk to reward ratios, but it is much more difficult. For newbie traders, it is recommended to stick to a lower ratio while starting out until you can find your sweet spot.

What RRR should I use?

It all depends on what type of trader you want to be, however, most traders seem to agree that somewhere around the 3:1 RRR is somewhat of a sweet spot.

When selecting a 3:1 RRR, you will still hit a large portion of your trades without getting continually stopped out and left feeling demoralised.

A 25% win rate using this RRR is definitely achievable using the strategies that we have already brought you in this course, you just need to stick to your trading plan and ensure you trade with discipline every time.

One of the main dangers comes with cutting your winning trades short, so be aware of moving your stop loss to a breakeven position when you don’t need to.

Constantly manage your trade for signs that your initial theory has now become invalid. If it has, it is perfectly fine to exit.

Final word on RRR’s

At the end of the day, the risk to reward ratios are not set in stone. You should chop and change them to fit in with your trading plan and set your targets based upon key levels that you identify in the market.

If you want to set a trade up with a RRR of 3:1 but you see that there is a significant resistance level where 2:1 RRR would be then it would certainly make sense to adjust your trade to avoid that.

The risk to reward ratios should be used as a tool to guide us with our targets and help us trade, not to hinder us from applying solid trading fundamentals to each trade.

Risk management basics

Forex is all about having a plan and sticking to it. As soon as veer away from the plan you are unnecessarily exposing yourself to the market in ways that you didn’t prepare for.

Whether that be trading with more money that you are prepared to lose, or using a different strategy than you have practiced and planned to stick to, straying from your plan can be costly.

That said, let’s look at some key areas of risk management for you to follow when trading the markets.

Position size

You need to work out exactly what percentage of your trading balance you are willing to risk on each trade, once you have that information you can decide what size of lot you are going to buy and how many of them you will purchase.

Most professional traders risk 1% or less of their account every time they enter a trade.

So if you have a $10,000 account then you should be risking no more than $100.

You should keep this number consistent at all times. Do not risk 4% on one trade, 1% on the next and then 3% after that.

Choose your account risk and then stick to that at all times. Consistency is key.

Setting stop losses/ pip risk

Now that we know how much we are willing to lose on our trade we need to calculate where to set our stop loss.

We will go into much more detail on stop losses in the next section, but for now just remember that the stop loss should be set at a predetermined distance from our entry point that signifies our maximum amount of risk per trade.

To do this, we must calculate how much one pip movement is worth to our account and then set our stop loss accordingly.

For example, if one pip is worth $1 to us and we have a $10,000 dollar account then the maximum we can afford to lose using a 1% risk is 100 pips.

Taking profit

This is secretly one of the hardest parts of trading, where to exit when we are in profit. We must use ur indicators and trade research to determine key points to exit our trades.

We should always enter a trade with a key idea of where our entry and exit points are, both stop-losses and profit taking areas.

Again, we will go over this in detail in a few sections time.

Keeping disciplined

As we have mentioned many times over this course, consistency and discipline is vital. Follow your trading plan, stick to your risk management strategy with effective position sizes and always place appropriate entry and exit points.

Why is it important

Having a solid risk management strategy that you adhere to is probably one of the most important aspects of successful trading.

Making a mistake with a trading indicator, placing a support or resistance incorrectly, or even hitting short instead of long are all redeemable errors. We are human, we all make mistakes. However, if we don’t stick to our risk management strategies, these small mistakes can wipe out our entire trading balance. This is exactly what we are trying to avoid.

Good things come to those who wait. Trade patiently, diligently, and with discipline and you will be half of the way there.

Note: If you stick to these tips and practice proper risk management you will likely never put yourself in a position of wiping out your account.


What is a take-profit?

Taking profit is essentially what we want to be doing each and every trade we take. A take profit is the place where we set our exit trade to get out of the market for a profit.

Similar to a stop loss, we should set our take profit trade at a predetermined place and not just a random point.

Newbie traders often make the mistake at aiming for a certain price level or a predetermined percentage gain.

These are just arbitrary levels and are not based on any sort of technical analysis and will almost certainly mean that you’re leaving money on the table.

Why is it important?

Taking profit is arguably one of the most emotionally and technically challenging aspects of forex trading.

People often struggle with taking profits early and seeing their trade run away on a huge move that they have now missed out on. This can really test even the best trader’s mental strength.

Mastering the art of taking profits is crucial for successful forex trading. If we get out too soon we could see our trade run away and we have missed out on profits.

On the other hand, if we don’t set appropriate take profit levels we could see our winning trades become losing trades if we have unrealistic targets.

Where to set our take profit trades?

There are many methods that we can use to take our take profit levels, here are a few of the most common:

  • The key support and resistance levels
  • MACD crossovers
  • RSI overbought/oversold levels
  • RSI divergences
  • Use your predetermined risk rewards ratio (more on this in the next section)

Look for critical levels in the market that could prove as obvious obstacles. If you are in a long position, it probably wouldn’t be a good idea to set your sell order above a significant resistance point.

Every trade you take will present a delicate balancing act between being over cautious and being too greedy. To eliminate this, set your targets at key levels in the market that take out the subjectivity in your trades.

Multiple take profit zones

Some traders find it beneficial to spread out there take profit orders over two or more areas in order to take their profit incrementally.

This can really help with the mental side of trading as once you have reached your first TP (take profit) level your trade will remain in profit even if it dips below your initial entry point.


This is usually more common in swing trades that are targeting larg pip movements over one to a couple of days. If you plan to do this then it makes sense to set the TP orders at or just before key levels in the market.

In the next section, we will look at risk-reward ratios that will help you to set better targets for your take profit orders.

When & when not to trade

Most of the information you will find when you begin your trading journey will be on how to best spot market opportunities and identify signals when they present themselves.

While, of course, that is extremely useful information, it could be argued that it is equally important to know when NOT to trade and to avoid the market all together.

Whether it be for a personal reason or due to macroeconomic events out of your control, there are certainly moments where you would be better waiting on the sidelines to trade another day.

Personal reasons to avoid trading

First of all let’s look at some times when you shouldn’t trade due to personal reasons. Some of these may seem obvious but you would be surprised how many people ignore these warning signs and blow away their entire trading capital.

Trading when highly stressed/ tired

If you are stressed/tired then you will not be performing at your best and your decision making will be sub par. It’s far better to take a rest and come back when you are feeling fresh again.

If you must do something to do with trading then it would be far better to use this time to study or to paper trade rather than using live funds.

During emotional times

Trading is no different to any other job that you may have in the real world. If you have some serious family issues or if you are under a lot of mental pressure then it would be better to take some time off.

If you ever feel like your emotions are getting the better of you then save the trading for another day.

Trading when surrounded by too many distractions

It’s essential that you are 100% focused when you are trading. You should always be monitoring your positions for how your trades are performing and how the market behaves. It’s hard to learn from the market if you are constantly distracted.

Trading after a heavy loss or during a continued losing streak

After a big loss there is no way you can trade with a clear head. Step away from the computer and come back another day when you have refocused and recovered from the loss.

It would be even better to analyse the trade to see what you did wrong so that you can avoid making a similar mistake in the future.

When you are at work

This ties in with a few of the aforementioned points. If you are at work you likely will not be able to focus and you will be distracted on multiple fronts. Also, we don’t want you to lose your job just yet! Wait until you’re bringing in the big bucks first.

Fundamental and technical reasons to avoid trading

The market reasons for not taking a trade are situations that are way out of your control.  Certain events have the potential to send shockwaves through the market, causing huge swings and periods of volatility.

Here are a few examples of such events. During these times, it’s almost always better so sit out and watch from the sidelines.

Large news events

News often plays a big role in the price fluctuations in the market. Some currencies are heavily tied to commodities while others will move depending on how their stock markets perform or sometimes even individual companies.

Keep one eye on the news and make sure you understand what impacts the currencies that you are trading.

Political elections results

This is one goes without saying. Keep an eye on key election dates as the price can fluctuate wildly based on election results.

High profile speeches and budget releases

High profile speeches and budget releases can affect the market considerably. Be aware of when they take place and wait for them to pass by so you can avoid the market uncertainty and resulting speculation.

Bank holidays

A large portion of the trading volume comes from the banks. When they are closed during the bank holiday it means the markets are far less liquid than usual. This can cause market stagnation and occasionally erratic price movements.

Market open/ close

It’s a good idea to try and avoid the market/open close as it can often bring increased volatility. Traders are frantically trying to open/close their positions which can cause erratic price movements.

A word on overtrading

As the markets are open 24 hours a day, five days a week, there are a huge number of opportunities for traders to take advantage of. This is both a blessing and a curse.

Overtrading is one of the major reasons why traders lose money. You should not be entering a position at every signal that you see. As the old saying goes, “good things come to those who wait.”

It pays to wait for clear cut setups where a number of your indicators are all pointing in the same direction. Stick to your trading plan religiously, don’t chase your losses, and keep your trading decisions as objective as possible.


We have mentioned stop-losses many times in this course so far, and for good reason, we need them! Time to dive a little deeper into the specifics.

As you know, the forex market can be volatile and difficult to predict at times. Even the best traders get it wrong and find that the market moves in the exact opposite direction to what they predicted.

Even if all our indicators are pointing in one direction it is still entirely possible that the market can move violently in the other. A major economic event, a new banking policy, and even strong rumours can affect the price out of nowhere, we must be prepared for this.

A lot of newbie traders will make the mistake of riding the trade it and hoping (praying) that the market will turn back in their favour. Others will cut their loss immediately as soon as they see it turn red and unfortunately, both of these strategies are incorrect.

What we need is a stop-loss. Simply put, a stop loss is an order that we place into the market that automatically executes when the price hits a certain level. It removes all the stress and anxiety from trading without a stop loss and acting the market run away with our entire trading balance at risk.

Sometimes it’s best to cut your losses and live to fight another day.

Where to place our stop loss

As we touched upon earlier, we can calculate precisely how many pips we are willing to lose for each trade.

If we know that we only want to risk 1% of our account, we should calculate how many pips that equate to, and then we know the maximum point at which we can place our stop loss. However, this is NOT the best strategy. We should always set our stop-loss at the point of invalidation.

This means that we should place our stop loss at the point where the reasons why we entered our trade are no longer valid.

For example, let’s say that we expect the price to bounce off a support and reverse into an uptrend. Rather than setting our stop loss at 100 pips below the support, we could set it at maybe 10-15 pips below the support.

That way, we know that our initial trade theory has been proven to be wrong (the support did not hold), and we can exit for a small 10-15 pip loss.

For the sake of this trade, it would be unnecessary to lose all 100 of our allocated pips based on our risk management strategy.

This is the MAXIMUM you are willing to lose on a trade, not how much you should lose each time.

Trailing stop-loss

Other than a setting a regular set stop-loss we can also utilize what is called a trailing stop loss.

A trailing stop loss will move based on fluctuations that occur during the trade.

For example, if you set a BUY order on EUR/USD at 1.1000 with a 50 pip trailing stop at and the market moved up to 1.1050 then the trailing stop would move up to 1.1000.

Every-time the trade moves in your favour the trailing stop loss will trail behind by 50 pips. This is a great way to lock in profits and attempt to ride successful trades out for as long as possible.

The stop loss will only trigger once the market has moved against you by 50 pips.


Moving your stop-loss to your entry position

One thing that traders like to do is to move their stop loss to the point of entry when a trade goes in the favour. This can be a great tactic as it essentially removes all risk from the trade and it effectively a “free shot” at making extra profits.

While this can often be a good idea and can real help remove the stress from a trade it can also mean that you turn some winning trades into break even ones

Sometimes the market can fluctuate violently and it can take out your stop loss before carrying back on its trajectory.

If this happens you can see your trade closing before you get to your profit taking zone and you have just missed out on a winning trade.

While it’s okay to do this sometimes, it’s almost always better to set your stop loss at the point of invalidation.