The currency market movement carries with it much uncertainty – although returns can be great, losses can be just as significant. It is therefore a good idea for you to have a plan in place before you start to trade. Before placing a position, plan exactly how you will trade by doing your research and choosing currency pairs that are optimal for you. Consider the amount of time you aim to stay in a position and set goals for that position. For example, before opening a position, create an exit strategy, deciding at what level of profit you will close the trade – or alternatively, what level of loss. It is important to make these decisions before you start trading, so that you can place your stops and limits accordingly.
Stop-loss facilities are highly recommended in order to protect capital in the event of sudden market movements against your position. ETX Capital offer stop loss tools, and for long-term positions, ETX Capital’s premium guaranteed stops remain in place outside trading hours – and will take action even when the market surges. This is a useful way of enhancing your protection against slippage.