Hello dhan laks,

I know you wrote this awhile back, but thought I`d respond anyway.

I am a bit concerned you joined a forex company without knowing this basic, CRITICAL information.

I myself joined a company that offers excellent
training and covers stop and limit order information in their basic beginning forex training course.

You don`t want to go into a live account unless you understand the basics and have made hundreds of trades in a demo account.
This is the advice my training has given me.
I got started in November, just after you did.

A stop loss is an order that you place to protect yourself if the trade goes against you.
For example, if you are buying the Euro, you expect the price to rise.
But if the trade goes against you by dropping, you want to have a stop in place BELOW your entry position.
(For momentum trades, I use a 25 pip stop loss.)
You want to enter your stop when you make the trade or right after.
Do not trust yourself to put a stop in later.
If you are selling the Euro, you expect the price to drop.
If the trade goes against you, you want to have a stop in place ABOVE your entry position.

Limit orders are something different.
A limit is a determined place you take profit if the trade reaches that level.
If you are momentum trading - taking trades in minutes to hours, you often won`t want to put in a limit, because you can manually move your stop to lock in profit.
Eventually, as the trade loses momentum, the price will hit your stop.
In a sense, a trailing stop becomes a limit order.
The more profit you make, the tighter you place that stop loss to protect it.

Say, you enter a position and you have your stop set, the market isn`t moving the way you`d like, or as quickly as you like, or you or taking a longer term position, or something is happening at home and you need to leave the computer.
If you need to be away from your trading platform and won`t be able to lock in your profit, you determine the level of profit you are aiming for and enter a limit order.
When your trade reaches that level, you limit out with profit.

I hope this is helpful to you, or anyone else coming into the forum.

I learned so much from the training company I use.
First off, they offer beginning and advanced FX courses that can be taken live or by webcast.
When you sign up for the course the tuition covers two people, so my husband can take the classes too.
The one time tuition allows us to take the course as many times as we want/need to.
Then we have chat rooms with experienced moderators using live charts (6-hours a day right now, with more times being added) who guide us through trading decisions on our demo accounts.

Beginning class covers momentum and day trading.
Advanced covers position and swing trading.
The teachers and moderators and even the founding members of the company are extremely helpful and available.
The chief trading specialist gave us his email to ask questions anytime.

This company was featured in an article in Canadian Business Magazine recently.

Go to discover.fxtrainer.biz to find a link to the article and more information about this terrific training company.

I`m a stay-at-home mother of six, former cosmotologist, and children`s writer and this company is teaching me a lifetime skill and I`m having a blast.
The teaching is clear and concise no matter what your background is.

Just this morning they had a chat room around "Freaky Friday" announcement day - the first Friday of the month.
They taught us how to trade around announcement day and I made over 100 pips! (In my demo account.)

It concerns me that you may be entering forex without the education you need to mitigate the risks inherent in this market.

Take care now,

Nannette

"StarCharter"