What are Stop Loss, Take Profit and Trailing Stop on MT4 and MT5?

What is stop loss?

Stop loss is an order for closing a previously opened position at a price less profitable for the client than the price at the time of placing the stop loss.

Stop loss is a limit point that you set to your order.

Once this limit point is reached, your order will be closed.

Please note that you need to leave certain distances from the current market price when you set up stop/limit orders.

For further details about the distance in points for each currency pair, please view the limit and stop levels here.

Using stop loss is useful if you want to minimize your losses when the market goes against you.

Stop loss points are always set below the current BID price on BUY, or above the current ASK price on SELL.

You can also view this video tutorial for a more detailed explanation.

See XM’s Education Center

What is take profit?

Take profit is an order to close a previously opened position at a price more profitable for the client than the price at the time of placing the take profit.

When the take profit is reached, the order will be closed.

Please note that you need to leave certain distances from the current market price when you set up stop/limit orders.

For further details about the distance in points for each currency pair, please view the limit and stop levels here.

Take Profit points are always set below the current ASK price on SELL, or above the current BID price on BUY.

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What is trailing stop?

Trailing stop is a type of stop loss order.

It is set at a percentage level either below the market price for LONG positions, or above the market price for SHORT positions.

Kindly note that you need to leave certain distances from the current market price when you set up stop/limit orders.

For more details about the distance in points for each currency pair, please view the limit and stop levels here.

View this video tutorial for a more detailed explanation.

See XM’s Educational Tools