What is a stop loss (SL)?

A stop-loss is commonly used in FX trading. It’s a risk management tool that adds protection to your funds.

Understanding stop-loss

A stop-loss is designed to limit your loss on a position or protect a portion of unrealized profits. You place a stop-loss order in advance to close your position when it reaches a specific rate.

The benefits of using stop-loss

• Stop-loss is an excellent way to manage your losing trades.
• You don’t need to be in front of your Forex Terminal to close a position.
• You can keep adjusting the stop-loss while the trade is open.
• Stop-loss is a good method to control your emotions (since you predetermine how much you’re willing to lose).

Note: with Amana Capital, whether under normal or volatile market conditions, your stop-loss order may not be traded in the market and will trigger at the next available rate. Therefore, you could lose (or get) more than you were initially willing to on the trade. Amana Capital doesn’t compensate for such occurrences in case of additional losses.