Mastering Stop-Loss Orders on MatchTrader
- Assess Market Conditions: Set a wider stop-loss in volatile markets and a tighter one in stable conditions to manage risk effectively.
- Use “Sell Stop” Order: Choose a “Sell Stop” order to automatically close your position when the market hits your stop-loss level, limiting losses.
- Review and Confirm: Always verify your stop-loss settings to ensure they align with your risk tolerance and market conditions.
What is stop-loss? The stop-loss order is probably the most important tool in the arsenal of any trader when it comes to risk management. It’s basically an automated instruction that you may give to some trading platform for the case if the market is moving against you by some amount. It will help you to limit your possible losses and not to make emotionally driven decisions in case of high volatility. Conversely, a take-profit order automatically closes your position once the market reaches a predetermined price you feel satisfied to lock in profit. In fact, both stop-loss and take-profit orders are quite powerful tools enabling traders to manage risks without being glued to the market all the time.
BullRush has made some changes in recent times, and one of the most important updates is that hedging is no longer available on its platform. While hedging is no longer possible, traders can place stop-loss and take-profit orders to protect their trades and maximize their chances of success. If you’re new to placing stop-loss orders, here’s a detailed guide on how to do it on BullRush:
Setting a Stop-Loss Order: Step-by-Step Explanation
- Make the Initial Trade: First, you have to be on a trade for you to set a stop-loss order. It is no different on BullRush from any other trade that you want to make. For example, you want to go long on the EUR/USD: you go onto the trading platform and execute the buy order based on your strategy. Once you have placed your trade, now you are ready to secure your position with a stop-loss order.
- Go to Pending Orders: Immediately you execute the trade, log in to your BullRush platform account and go straight to Pending Orders. Herein, you can work on setting your stop-loss and take profit orders. You shall be able to set up how and when precisely your trade should be closed by the system automatic response in regard to movement within the market.
- Setting the Stop-Loss Level: Once you are in the Pending Orders section, you would change settings to set at what level you want this stop-loss to be triggered. Assuming that, actually, you placed a Buy order of EUR/USD at 1.0300, you may protect yourself once the market goes against your expectations. You can set the stop-loss order at the price level, for example, 1.0249, which means that if the market falls to this level, your position will be closed automatically so as not to lose more.
A stop-loss order is important because it shows the maximum amount one is willing to incur as a loss on the trade. First of all, you need to study the market condition before setting your stop-loss level. If the market happens to be volatile, then you might want to give room to your trade to breathe by setting a wider stop-loss. In case the market is stable, you are good to go with setting a tight stop-loss.
- Choose ‘Sell Stop’ Order: Once you’ve determined your desired stop-loss level, the next step is to choose the correct order type. In this case, you’ll want to select a Sell Stop order. This ensures that the stop-loss is placed below the current market price for a buy order. A Sell Stop order is specifically designed to close the position when the price reaches the predetermined stop-loss level. You thus make sure that your position is automatically closed in the case of movement of the market against you-a helper for your account to avoid greater losses.
Example: You have a buy order at 1.0300 and set your stop-loss at 1.0249; by choosing “Sell Stop,” you would trigger the closure when the market price reached 1.0249.
- Confirm and Review Your Stop-Loss Order: With that set in place, make sure to verify for its execution and correctness. Now, go back to your positions and check whether the stop-loss order was correctly set. This will appear beside your open trade.
Now, it is time to review the stop-loss if it has been set or fix the amount acceptable of a risk that may present themselves. This, however, can be done anytime through a stop-loss order.
- Close Your Open Position if Necessary: Sometimes, you may want to manually close your open position before the stop-loss is triggered. You will do this by going to your open positions and hitting the “close” option. Closing out a trade prematurely allows you to lock in your profits or limit your losses if you think the market conditions have changed.
Benefits of Using Stop-Loss Orders
Setting of stop-loss orders is one of the efficient ways of managing and controlling risk during the trades. Here is a list showing some of its advantages:
- Limit Losses: Stop-loss orders help you define your risk upfront, thus limiting your potential losses in a trade.
- Emotional stress can be lessened as with a stop-loss set on, one does not need to watch constantly how the market is moving, enabling a trader to stay more with their trading plan.
- Preserve Capital: It automatically closes your position at the stop-loss level to prevent you from incurring larger, uncontrollable losses and helps save your trading capital.
- Be Consistent: Setting stop-loss orders helps you with your trading discipline and consistency, preventing impulsive decisions that turn against your trading performances.
Set a stop-loss order with confidence on BullRush using the easy steps and take full capacity of this highly competitive gamified environment. With active risk management provided for through stop-loss orders, sleep well, knowing that in case of bad moves, your position will get automatically closed at the stop loss to save you from excessive losses. This allows you to focus on developing your strategies and improving your trading skills without the constant worry of large, unexpected losses.
