ASPECTS THAT MUST BE BORN IN MIND BEFORE ANY OPERATION IN FOREX.

FUNDAMENTAL ASPECTS THAT MUST BE BORN IN MIND BEFORE ANY OPERATION IN FOREX.

In this article we will treat some of the fundamental aspects to bear in mind before any operation in Forex. We will show it suitable that are the orders that the different Forex platforms have to offer to the investor the possibility of handling his money appropriately before carrying out any operation.

We will begin for the time being showing how they can help the different available orders in the platforms to the investor.

The use of the order "limit".

With this order the investor who operates in the Forex platform can fix a point in the price of the currency in which, obtaining profit, the order is activated closing the position. Since we see, this order is used in order to go out of an operation obtaining sure profit.

This order works of the following way:

In case you are giving buy orders in his Forex platform, this one order will be able only to be placed over the price of the currency at the moment when the order is activated. This is like that, because, on having bought the way of obtaining profit, it is closing the operation when the price is higher than that of the moment in which the order was executed.

When the orders are of sale, it happens in an opposite way: The extreme order will be able only to be programmed below the price to which in the this moment the currency because when you are selling what generates profit it is the gradual decrease of the price of the currency with which it operates.

That's why the investor of Forex must glide before doing an investment which is going to be the goal of his profit with the above mentioned operation. After there is fixed a clear and possible goal of his potential profit, he can programme the extreme order so that he avoids him to lose money after having gained it, due to the vales and combs that usually offer the prices of the currencies.

The use of the order “stop loss”

This order is a fundamental order on having operated in the Forex platforms. By means of this one order, the investor of Forex programmes a price of the currency in which it is invested in which the operation must close with minimal losses. Often it happens to the Forex investor that it opens an operation that means a loss position, this order allows him investment to go out of these events without much ado losses that those to that was ready to have when I plan the investment, that is to say, those losses that were inside his calculations.

This order works of the following way:

In case the Forex investor is giving buy orders in the platform, the Stop loss order will be able only to be programmed below the price to which the currency was when I begin the operation. This is due to the fact that if you are buying, the gradual decrease of the price to which the currency is bought generates the losses.

Contrary, if the order that you are using is the sale order, then the stop loss order will be able only to be established over the initial price in which the operation was begun. This is due to the fact that the gradual increase of the price of the currency does that the currency that you sell generates his losses.

 A few final advices:

It is of wide diffusion this advice on having operated in Forex: Orders limit and very exact Stop Loss must never be used, since it turns out that the market stretches to handle a relative volatibilidad, which would not allow the use of the tendencies to the persons who use very exact orders.

It is recommended the orders limit to be less exact than the orders of Stop Loss, since an exact extreme order what it can do is to limit the profit when often there is nothing that to lose, on the other hand, an order of Stop Loss allows to be no major losses than one is

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