Zulutrade: Using Stop Loss and Limit Orders

Limit and Stop Orders

Limit is a setting that if put in place by the client or a provider it will close the trade at a given profit.
Stop is a setting that if put in place by the client or a provider it will close the trade at a given loss.

When trading Forex, being in a losing position is inevitable, but we can always control and limit our risk when we are caught in one. A Stop loss order is a very important trade management technique where you can  prevent further losses on a position after the exchange rate breaks through a prespecified level.  Some signal providers in ZuluTrade implement their own stop loss in their trading system, while there are other providers who do not. In either case it will be up to you to put a stop loss order to make sure your account survives during times of huge drawdowns and avoid the dreaded margin call.

On the other hand a Limit order is used to lock in profits when the exchange rate hits a prespecified rate. This trade management technique lets you take profits at a certain level so you can avoid losing your profits in case the market moves against your position.

There are three ways where you can put Stop Loss and Limit Orders in Zulutrade:

1. When you have open positions you can place a stop loss and/or a limit order for each individual trade.Just click on the default stop or limit for each open position under the "Positions" tab. A window will appear where you can type in your stop or limit for each position. You can adjust the stop loss and limit orders for automated or manual trades.

2. You can place a stop and limit order for ALL trades that will be taken by your chosen signal providers. Under the "Settings" tab, click on the Advance Settings to expand the setting options. You can then type in  your desired stop and limit (in pips) for each signal provider under the Stop and Limit boxes. Click on the "Safe" button if you want to use the signal provider's stop instead of yours in case it is less risky to do so.

3. The third option you can use to place stop and limit orders for each currency pair. This option comes in handy if you wish to take into consideration the different volatilities of each currency pair in managing your risk.Under advance settings click on the "notebook" icon. A new window will appear where you can adjust the stop and limit for each currency pair.

Your stop loss and limit levels will vary depending on your capital, the signal providers you use, and your risk tolerance. A stop loss level that is too close to your opening level might do more harm than good. Always study your signal provider's trading history and drawdown and adjust your stop loss levels according to your capital.

Related Posts: Zulutrade: Understanding Drawdown

Posted in: Risk Management