Take-profit and Stop-loss on the IQ Option platform!

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Master Stop-Loss and Take-Profit Feature

Stop-loss and take-profit (SL/TP) management is one of the most important concepts of Forex. Deep understanding of the underlying principles and mechanics is essential to professional FX trading.

Stop-loss is an order that you send to your Forex broker to close the position automatically. Take-profit works in much the same way, letting you lock in profit when a certain price level is reached. SL/TP is, therefore, used to exit the market. Preferably, in the right way and at the right moment. Several strategies exist, making the decision process harder but also providing the trader with additional opportunities.

SL/TP customization menu can be accessed in the upper right-hand corner

Opening stop-loss orders

What is a stop-loss and why would anyone use it in trading? By opening a stop-loss order you determine the amount of money you are willing to risk in a case of each particular deal.

IQ Option trading platform calculates the said amount as a percentage of your initial investment.

Cutting off losses at the right moment is a skill all traders have to learn sooner or later should they want to reach a certain degree of success. Professional traders do believe it is wise to adjust stop-losses to market conditions, not only the amount of money you are ready to sacrifice. Taking technical analysis into consideration can also be practical. And remember, the majority of traders agree: it is vital to know when to get out of trade even before opening a position.

There are three major ways to determine optimal stop-loss points:

  1. Percentage Stop. Determine the stop-loss position based on the amount of capital you are willing to risk at each particular moment. Stop-loss in this case will heavily depend on your total capital and the amount of money invested. Remember that experts advocate allocating not more than 2% of your trading capital to a single deal.
  2. Chart Stop. This method is more technical analysis-oriented than the others. It turns out, support and resistance levels can also help us determine optimal SL/TP points. Setting stop-loss beyond support/resistance levels is one way to do it. When the market trades beyond these areas, there is a good chance the trend will continue working against you. It is time to take what’s left of your investment.
  3. Volatility Stop. Volatility is something traders don’t want to miss. It can differ dramatically from asset to asset, thus making a tremendous impact on trading results. Knowing how much a currency pair or a stock can move will help greatly in determining optimal stop-loss points. Volatile assets may require higher risk tolerance and therefore greater stop-loss levels.

Bollinger Bands is an indicator used to estimate market volatility

It might be a good idea to shape your own SL/TP system, combining different approaches. It should be based on your trading strategy and market conditions.

By using SL/TP you do not accept an obligation to wait until the predetermined price level is reached. Feel free to close a deal should the market demonstrate unfavorable price action. But at the same time do not let your emotions intervene. Have you ever noticed how devastating emotional trading can get? The same happens when you place a stop-loss order and don’t give your trading strategy enough time to validate itself.

Stop-loss is not simply the exit point, good stop-loss is set to become an “invalidation point” of your current trading idea. In other words, it should prove the chosen strategy does not work. Otherwise it may be a good idea to wait.

Opening take-profit orders

Stop-loss and take-profit work in pretty much the same way but their levels are determined differently. Stop-loss signals serve the purpose of minimizing the expenses of an unsuccessful trade, while take-profit orders provide traders with an opportunity to take the money at the peak of the deal .

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Taking profit at the right time is as important as setting optimal stop-loss signals. Market always fluctuates and what seems like a positive trend can turn into a downturn in a matter of seconds. Some would say it is always better to take respectable payouts now than to wait and risk losing your potential payouts. Note that not letting your payout grow high enough and closing the deal prematurely is not good either, as it would eat up a portion of the potential payout. Waiting for too long can be equally detrimental.

The art of take-profit orders is to pick the right moment and close the deal right before the trend is about to reverse . Technical analysis tools may be of great help in determining the reversal points. You may choose between Bollinger Bands, Relative Strength Index or Average Directional Index. These indicators work best for the purposes of SL/TP management.

RSI can help determine optimal take-profit positions

Certain traders might recommend using a 1:2 risk/reward ratio . In such a case, even if the number of losses is equal to the number of successful deals you would still be generating payout in the long run. Consider finding an optimal risk/reward ratio, that would suit your personal strategy and remember there are no universal rules that would work for each asset and every trader.

Things to remember

Keep in mind that SL/TP is just yet another tool in your rich trading portfolio. Trading skills are not limited to correct usage of indicators and stop-loss/take-profit orders. Don’t let any automated system trade for you. Rather rely on it in order to get better control of your deals and emotions. It may take some time to learn the basics of SL/TP orders but when it is done, you are left with another must-have trading skill.

NOTE: This article is not an investment advice. Any references to historical price movements or levels is informational and based on external analysis and we do not warranty that any such movements or levels are likely to reoccur in the future.
In accordance with European Securities and Markets Authority’s (ESMA) requirements, binary and digital options trading is only available to clients categorized as professional clients.

GENERAL RISK WARNING

CFDs are complex instruments and come with a high risk of losing money rapidly due to leverage.
87% of retail investor accounts lose money when trading CFDs with this provider.
You should consider whether you understand how CFDs work and whether you can afford to take the high risk of losing your money.

Take-profit and Stop-loss on the IQ Option platform!

As many have already noticed IQ Option has added Forex to its collection of trading tools. The approach of this event was truly innovative and engaging, and therefore, as a consequence we are happy to introduce you a trading benefits of Take-profit and Stop-loss orders (SL/TP). Because the control of SL/TP is one of the key concepts at Forex market.

Getting profit from the deal at the right time is as important as to determine the optimal moment of its stop. Price fluctuations is an integral part of the life of the market, and what once seemed like a positive trend in one moment can totally opposite turn into a sudden decline.

Common belief says that it is always better to take profit now rather than wait and risk losing possible earnings. Remember that giving profit to grow without closing the deal prematurely is not bad, because it is the way for a part of the potential profits is formed. But in any case you should not get involved and wait until the last, because the chances to keep or lose are equal.

Traders use Take-profit and Stop-loss orders to prevent unnecessary potential financial risks. This occurs through the confining of loss and an automatic closing position, thereby ensuring the timely receipt of profit from successful deals that will help to keep the potential profit from fluctuations at the market. In other words, these features help to create a “safety net” for traders in the case of impulsive, premature and rash solutions by trading online.

In simple words, the principles of work of Take-profit and Stop-loss are the same, while their definition are different. Take-profit orders gives you the opportunity to take off money at the peak of the transaction. And the essence of Stop-loss orders lies in minimizing of the expenses of the trader. The trader can set SL/TP orders over the already existing, as well as over pending trading. But it is worth to remember, that they will be performed only at open positions and not in case of pending orders.

So, what kind of miracle Stop-loss and Take-Profit orders are? Why should a trader use it in trade?

Stop-Loss order

Stop-loss is a convenient way to minimize losses from the deal, if the price of the chosen asset is beginning to change – progressing in an unprofitable trend. In other words, this it lets trader to send this order to his Forex broker and limit its possible losses on a current open position. The position of a specific deal is automatically closed at the current market price when the price of the chosen asset reaches a current level. Thus, trader minimizes his potential losses from the ongoing trade. It is important to note that Stop-loss price does not have to be the price of the Stop-loss order execution, that is, it can also be used if price gap occures.

Stop-Loss order opening

When you open Stop-loss orders a trader it is necessary to determine the amount, which you willingly ready to risk in the implementation of each specific deal. In its turn, a special calculator at IQ Option trading platform will automatically perform all the necessary calculations for a setted amount of interest depending on the value of the initial investment. The success of the trader will consist of a timely response and ability to pre-close the transaction to not incurre the losses. Every trader develops these skills after the lapse of considerable time with the an accumulated trading experience. Top traders share the usefulness of these orders, as not just the amount of money trader is willing to “sacrifice”, but also to ensure that it is reasonably use to the conditions of the market as a whole.

3 basic techniques of determining the optimal Stop-Loss orders:

• “Percentage stop” is used to determine the position of Stop-loss orders, based on the amount of investment that a trader is willing to risk at any given moment of trading process. With all this, Stop-loss order depends on total capital and the amount of invested funds. But remember, one unwritten rule of experts, who recommend to allocate a Stop-loss order only approximately 2% (not more) of the total amount of trading capital per one transaction.

• “Graphic stop” – a method oriented for the most part on a technical analysis in contrast to the rest of the methods. As experience shows, the optimum Take-profit and Stop-loss orders allow to determine the levels of support and resistance. Specifying the point of Stop-loss beyond these levels is in itself one of the methods of how it can be done. Trader gets a good chance, when the market trades outside of these areas, as trends continue to work against you. As a result, it will be the time of collecting the remainder from the investment.

• “Volatility stop” is “desirable thing”, that noone wants to miss. As practice shows, the Volatility stop can be pretty much different for various assets. This significantly affects on the trade, because knowing what range of price movement whether stocks or commodities, trader will be able to set the optimum Stop-loss order. You should always remember that all volatile assets require a high attention to risk creating, and as a result, expectation of higher levels of Stop-loss orders.

Take-Profit order

Take-profit orders allow to close the deal with a profit, when the price of asset reaches a certain set level. The execution of this order provides to closing the deal under the rules of limit orders. Take-profit can be set only at the open position, stop order and/or pending order.

It is recommended to use technical analysis tools for Take-profit orders to determine the ideal moment for closing the deal right in front of the trend reversal. Pay your attention on Bollinger bands, Average Directional Index and/or Relative Strength Index, as all of them are best suited for controlling Stop-loss and Take-Profit orders.

(!) little note: it is recommended to use the ratio of risk-reward equal to 1:2. So, rader will be able to retain profitability constantly on a long term basis, even with an equal ratio of failed and successful transactions. But this does not mean that this ratio is the essence and the Golden rule which must be followed. You should always correct any advice according to your spesific trading strategies. In this case, look for your optimal risk-reward ratio, because none of the known rules does not work the same way for an individual asset as mmuch as for each trader.

Simply saying, the traders use SL/TP orders to correctly leave the market at the right time. Most of the traders uses Stop-Loss orders in opposed to Take-Profit orders, as they probably feel them less necessary. However, in our opinion, this can be wrong, because Take-Profit orders help to avoid many problems and allow to save money in carrying out of the deals on a winning position.

Those traders use SL/TP orders, are not obliged to continue the trade, till the asset price reaches a predetermined level. Everyone is free to close the deal under unfavorable price movements at the market. Don’t let your emotions make decisions. Give it the right, cold and objective decision. Because doing it impulsive can be often the most devastating, leading to unreasonable losses. This unwritten rule works in the case of determination of ST/TP orders.

“General Risk Warning: Binary options trading carry a high level of risk and can result in the loss of all your funds.”

Maîtrisez les fonctions Stop-Loss et Take-Profit

La gestion stop-loss et take-profit (SL/TP) est l’un des concepts les plus importants du Forex. Une compréhension approfondie des principes et des mécanismes sous-jacents est essentielle au trading professionnel sur le marché des changes.

Le stop-loss est un ordre que vous envoyez à votre courtier Forex pour fermer la position automatiquement. Le Take-profit fonctionne de la même manière, vous permettant de verrouiller le profit lorsqu’un certain niveau de prix est atteint. Le SL/TP est donc utilisé pour sortir du marché. De préférence, de la bonne manière et au bon moment. Il existe plusieurs stratégies, qui rendent le processus de décision plus difficile mais qui offrent également des possibilités supplémentaires au trader.

Le menu de personnalisation de SL/TP est accessible dans le coin supérieur droit

Ouverture des ordres stop-loss

Qu’est-ce qu’un stop loss et pourquoi l’utiliser dans le trading? En ouvrant un ordre stop-loss, vous déterminez le montant d’argent que vous êtes prêt à risquer pour chaque transaction particulière.

La plateforme de trading IQ Option calcule ledit montant en pourcentage de votre investissement initial.

Limiter les pertes au bon moment est une compétence que tous les traders doivent apprendre tôt ou tard s’ils veulent atteindre un certain degré de réussite. Les traders professionnels estiment en effet qu’il est sage d’ajuster les stop-loss aux conditions du marché, et pas seulement à la somme d’argent que vous êtes prêt à sacrifier. La prise en compte de l’analyse technique peut également être pratique. Et n’oubliez pas que la majorité des traders est d’accord: il est essentiel de savoir quand se retirer du marché avant même d’ouvrir une position.

Il existe trois grandes façons de déterminer les points de stop-loss optimaux:

Stop en pourcentage. Déterminez la position stop-loss en fonction du montant de capital que vous êtes prêt à risquer à chaque instant. Dans ce cas, le stop-loss dépendra fortement de votre capital total et du montant d’argent investi. N’oubliez pas que les experts préconisent de ne pas affecter plus de 2% de votre capital de trading à une seule transaction.

Stop graphique. Cette méthode est plus axée sur l’analyse technique que les autres. Il s’avère que les niveaux de support et de résistance peuvent également nous aider à déterminer les points SL/TP optimaux. Placer un stop-loss au-delà des niveaux de support/résistance est une façon de le faire. Lorsque le marché se trade au-delà de ces zones, il y a de fortes chances que la tendance continue à jouer contre vous. Il est temps de prendre ce qui reste de votre investissement.

Stop volatilité. La volatilité est une chose dont les traders veulent profiter. Elle peut varier considérablement d’un actif à l’autre, ce qui a un impact considérable sur les résultats des transactions. Savoir à quel point une paire de devises ou une action peut évoluer aidera grandement à déterminer les points de stop-loss optimaux. Les actifs volatils peuvent nécessiter une plus grande tolérance au risque et donc des niveaux de stop-loss plus élevés.

Les bandes de Bollinger sont un indicateur utilisé pour estimer la volatilité du marché

Il peut être judicieux de concevoir votre propre système SL/TP en combinant différentes approches. Il doit être basé sur votre stratégie commerciale et les conditions du marché.

En utilisant les SL/TP, vous n’acceptez pas l’obligation d’attendre que le niveau de prix prédéterminé soit atteint. Sentez-vous à l’aise de conclure une transaction si le marché affiche une évolution défavorable des prix. Mais en même temps, ne laissez pas vos émotions intervenir. Avez-vous déjà remarqué à quel point le trading émotionnel peut être dévastateur? La même chose se produit lorsque vous placez un ordre stop-loss et que vous ne donnez pas à votre stratégie de trading le temps de se valider.

L’ordre stop-loss n’est pas simplement un point de sortie; un bon ordre stop-loss est appelé à devenir un « point d’invalidation » de votre idée de trading actuelle. En d’autres termes, il doit prouver que la stratégie choisie ne fonctionne pas. Dans le cas contraire, il peut être judicieux d’attendre.

Ouverture des ordres take-profit

Le stop-loss et le take-profit fonctionnent à peu près de la même manière, mais leurs niveaux sont déterminés différemment. Les ordres stop-loss ont pour but de minimiser les dépenses d’une transaction infructueuse, tandis que les ordres take-profit donnent aux traders la possibilité de prendre l’argent au plus fort de la transaction.

Engranger les profits au bon moment est aussi important que de fixer des signaux stop-loss optimaux. Le marché fluctue toujours et ce qui semble être une tendance positive peut se transformer en une baisse en quelques secondes. Certains diront qu’il est toujours préférable de prendre des paiements respectables maintenant plutôt que d’attendre et de risquer de perdre vos paiements potentiels. Notez qu’il n’est pas bon non plus de ne pas laisser votre paiement augmenter suffisamment et de conclure l’accord prématurément, car cela engloutirait une partie du paiement potentiel. Attendre trop longtemps peut être tout aussi préjudiciable.

L’art des take-profit consiste à choisir le bon moment et à conclure l’affaire juste avant que la tendance ne s’inverse. Les outils d’analyse technique peuvent être d’une grande aide pour déterminer les points de retournement. Vous pouvez choisir entre les bandes de Bollinger, l’indice de force relative ou l’indice directionnel moyen. Ces indicateurs sont les plus efficaces pour la gestion des SL/TP.

Le RSI peut aider à déterminer les positions optimales de take-profit

Certains traders pourraient recommander d’utiliser un rapport risque/rendement de 1:2. Dans ce cas, même si le nombre de pertes est égal au nombre de transactions réussies, vous obtiendrez tout de même un gain à long terme. Pensez à trouver un rapport risque/rendement optimal, qui conviendrait à votre stratégie personnelle et souvenez-vous qu’il n’existe pas de règles universelles qui fonctionnent pour chaque actif et chaque trader.

Ce qu’il faut retenir

N’oubliez pas que les SL/TP ne sont que des outils de plus dans votre riche arsenal de trading. Les compétences en matière de trading ne se limitent pas à l’utilisation correcte des indicateurs et des ordres stop-loss/take-profit. Ne laissez aucun système automatisé trader pour vous. Comptez plutôt sur eux pour mieux contrôler vos transactions et vos émotions. L’apprentissage des bases des ordres SL/TP peut prendre un certain temps, mais une fois qu’il est terminé, vous obtenez une autre compétence de trading indispensable.

REMARQUE: Cet article n’est pas un conseil en investissement. Toute référence à des mouvements ou niveaux de prix historiques est informative et basée sur une analyse externe et nous ne garantissons pas que de tels mouvements ou niveaux puissent se reproduire à l’avenir.
Conformément aux exigences de l’Autorité européenne des marchés financiers (AEMF), le trading d’options binaires et digitales n’est disponible que pour les clients classés comme clients professionnels.

MISE EN GARDE GÉNÉRALE CONTRE LES RISQUES

Les CFD sont des instruments complexes et comportent un risque élevé de perdre rapidement de l’argent en raison de l’effet de levier.
87% des comptes d’investisseurs particuliers perdent de l’argent lorsqu’ils tradent des CFD avec ce fournisseur.
Vous devriez vous demander si vous comprenez le fonctionnement des CFD et si vous pouvez vous permettre de prendre le risque élevé de perdre votre argent.

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