This article looks at the ways that you can prevent your winning forex Australia trade from turning into a losing trade.
When you trade on the forex Australia market you are going to be looking for a winning trade. The biggest mistake that you can make when you trade is allowing your winning trade to turn into a losing trade. This will go against the primary principle of the forex Australia market which is to protect your profits. When you protect your profits you will ensure that you are making money on the market and that you are not losing too much. There are a number of steps that you should consider when you look to protect your profits.
The Management of Your Forex Australia Capital
The first point that you should consider is the management of your forex Australia trading capital. When you manage your capital you are going to be able to determine the profits that you can make and keep the profits. The movements on the market can come quickly and this means that the losses you can make will also come quickly.
One of the ways that you can protect your profits with capital management is through the taking of your profits. There are many traders who want to leave their trades to run in the hope that they will be making a greater profit. When you do this you are going to run the risk of having your winning trade turn into a losing trade. There are a number of ways that you can prevent this and you need to know about the two most popular.
The Use of the Trailing Stop
Once of the best ways to prevent your winning trade from turning into a loser is to have a trailing stop. When you use a trailing stop you are going to be using a limit order that follows the price of your trade. This means that when you make a profit the stop loss order will follow the trade price and remain a set number of pips below this.
This stop loss order allows you to protect your profits because of the placement. When you make a profit the stop loss moves with your trade, but when you make a loss the stop will not move. This means that the profits you make on the trade before the stop loss is triggered will be safe. When you use a normal hard stop you will have to lose all of the profits and make a loss before the order is triggered.
Trading in Different Lots
There are a lot of traders who use one lot for the trade that they complete. A good way to protect your profits is to have more than one lot when you trade. When you trade with two lots you will be able to set different price targets. This means that the one lot can be placed with a price target that is very conservative while the second lot has a more aggressive price target.
When you use this trading you need to employ stop loss orders. When you do this you will be able to protect the profits that you make from the first lot while the second lot is still going.