Sell ​​stop.

When trading on the Forex currency market, both instant and pending orders are used, and the latter have several options, one of which is a sell stop order.

Sell ​​stop - a pending order to sell the base currency , involves opening a position if the price falls below a set indicator. As a rule, it is installed during a downtrend, but other installation options can be used.

It is assumed that after the Sell stop is triggered, the price will continue to move downward, thereby bringing profit to the trader. In fact, this is a classic version of a sell order, but it is not triggered immediately, but only after reaching the mark specified by the trader.

Setting a sell stop order.

In order to place this order, it is enough to select in the window for setting a new order opposite the “Type” tab - Pending orders, and then in the menu that appears, specify the type - Sell stop and execution parameters.

In addition, you can limit the validity period of the order itself, for example, one day.

This function is quite important and should not be ignored. Its essence is that if your order is triggered as a result of a sharp drop in the exchange rate, then there is a high probability that the position will be closed with a profit. In the same case, if the trend gradually reaches the trigger point, there is a high probability of its reversal. When placing pending orders, you should also not ignore the parameters of stop orders, especially for stop loss. Very often, novice traders forget about it when placing a new order, and as a result they discover a leaked deposit. Risk insurance is mandatory in any case, this is the only way you can protect your deposit, especially since traders almost never control their own pending orders.

A sell stop assumes that the take profit will have a lower value of the execution price, so that it will be triggered as soon as the short position reaches a certain level of profitability. But the stop loss should, on the contrary, be greater than the execution price, in this case, if after the position has been opened the trend goes up again, the stop loss will not allow you to completely destroy your deposit.

Many traders forget about stops when placing pending orders; as a rule, such forgetfulness is punished by loss of the deposit or significant losses.

Trading strategy.

There are several options for how you can set a sell stop:

1. Breakout of the price channel, first we build support and resistance lines, then at some distance from the support line we set our order, usually 15-20 points.

2. Trading on Forex news - before the release of important news, we place an order 10-15 points below the existing price.

It will trigger if an expected event has a negative impact on the base currency. 3. Significant levels – these can be lower price levels.

For example, the price of the euro/dollar currency pair fluctuates around 1.3010 – 1.3060 during the week. In this case, we set the sell stop order at 1.2985. If you wish, you can find other options for using Sell stop in Forex trading. The second option for pending orders for opening short trades is sell limit .