Use STOPs as a conservative order technique for extra confirmation

Why and how to use Sell STOP Order in Forex Trading

As traders many times we define a potential reversal zones only to see it getting broken due to high volatility. Violation of the prz does not mean that the zone is not valid and price will not react to it. To tackle this problem we can make use of STOP orders instead of LIMIT orders. For example in the trade below the prz is shown in red. We usually Sell LIMIT here so that as soon as the prices reaches the zone we are in the game. But we can achieve the same with minimal risk by using SELL STOP order too. Once the price has come to the zone the order is paced in the queue and as soon as it leaves the zone, it gets fulfilled. Your stop loss will be set wherever you ordered for. This gives a better confirmation on the trade by checking whether the price is going in the anticipated direction or not.

How to use sell stop


Another example is as below where we have used BUY STOP to fill the order as soon the price left the zone.


How top use buy stop
How top use buy stop


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