5. STOP and LIMIT orders
Now it's time to learn more about useful trade tools that allow in some way protect you from unexpected losses and to fix the planned profit.

These are STOP and LIMIT. You can any time (during market working hours) put the order to close the open position when the price reaches the specific value. For example, you open a position, expecting that quotes will go up (on the chart). Besides, in order to secure oneself from the significant losses when the currency sharply moves lower, especially when you either do not control, or can lose control of the market, you put STOP, i.e. indicate the price lower than the current value, at which your position should be closed without additional orders. By analogy, if you opened down, you indicate the price higher the current value. You should take into consideration that if STOP will be too close to the current value, than the incidental price jump may close with loss the correctly opened position, and if it will be too far — the losses may be too serious. LIMIT, in turn, is the specified quote which when reached will be closed with profit, i.e. the LIMIT quote is always higher than the current value, if you trade up, and lower — if you trade down.

There is a very widespread mistake that is made by many beginners. You need to remember for which quote — BID or ASK — the order shall be executed. Let's see the example of BUY position. As we said before, the BUY position is opened at ASK, and closed at BID, i.e. STOP or LIMIT will be executed only when BID reaches the specified price. As ASK on charts is always higher than BID, than chart HIGH is always ASK, and LOW — BID. Thus, the chart shall go through LIMIT for a spread value, before LIMIT is executed. STOP will likely to be executed as soon as the chart touches the price. As a rule, the beginners are very surprised to see that their LIMIT was not triggered, despite the chart HIGH is several points higher than the LIMIT price. It should be like that, as HIGH shall be higher than LIMIT by a value not less than spread.

Another widespread mistake is that trader doesn't differ the indicative charts built based on information quotes, i.e. received from hundreds, or even thousands banks and brokers, from quotes of specific company with which he/she works.êîòèðîâêàìè êîíêðåòíîé êîìïàíèè, ñ êîòîðîé îí ðàáîòàåò. The indicative charts have more frequent quotes and broader dispersion than at each of the brokers. Besides, different brokers have different indicative charts due to different providers used for chart building. Thus, to understand why some order was triggered or not triggered, you need to observe the charts from brokers which you work with. And you'd better build the chart only by its own, if possible, quotes. You need to indicate “AKM” source code in AFMCharts.