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  4. Take Profit and Stop Loss

Take Profit and Stop Loss

Managing your portfolio of securities is quite difficult – it is important to manage to buy or sell stocks and bonds at a reasonable price on time to benefit from the transaction. Manually it’s not always possible to complete a transaction at the right time.

Therefore, two useful functions were created – «levers of management» of their portfolio of securities. They are called take profit and stop loss – two buttons whose value you must know^

  • Take profit – an automatic sale of a stock or a bond at a time when the potential price (set by the owner) is higher than the actual price for the period the task was set;
  • Stop loss – the automatic sale of stocks or bonds at a time when the potential price is lower than the actual one for the period of setting the task;

How to set stop loss and take profit

In order not to lose the possible profit, independently evaluate the chances of whether the asset can grow or fall in value. Most often, growth is intermittent, and the drop in value is very sharp. For example, if you bought a stock at 89 dollars, and it dropped to 84 dollars, put a mark of 90 dollars, as soon as you see a growth of 2 dollars – you just need to wait for the «profit».

Also, «automatic operations» with purchases work. If you have looked after some security, but the price does not suit you yet, place a pending Forexorder – you will have the paper as soon as its value reaches the set mark. Thus, you free yourself from constant market monitoring.