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How to use a trailing stop when trading

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Trailing stops are actually great for allowing traders to do just that and lock in profits on a position.

One of the best things about using a trailing stop as part of your day trading strategy is that you can set the stop to move according to the market. This of course means that you can follow these trends without having to keep an eye on the markets at all times.

One of the classic day trading strategies among traders is to use stop and limit orders.

  •     A limit order means that you set a minimum or maximum price at which you want to sell your asset. This means that the price will not go beyond the above price, whether you are buying or selling.
  •     A stop order, on the other hand, means that you set a specific price. Again, you cannot go beyond this price when buying or selling.

For example, if you have a long position, you can set your price just above the current market price in https://exness-vietnam.asia/ terminal. This way you can make a profit. You then set a stop order below the current price, which limits the loss on the position.

When your position goes live, everything is automated so you don't have to worry about closing the position manually. Both orders are a great way for you as a trader to make a financial profit and limit your broker's dreaded margin calls.

Pay attention to trading costs

Most day trading brokers charge a variety of fees such as margin rates and commissions. Traders who are very active on a daily basis are often eligible for special discounts on commission fees. We believe it is an essential part of any trading day trading strategy to be aware of the costs you are likely to incur.

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Spreads

In simple terms, the contrast between the ask price and the bid price of an asset is the spread. In the short term, it doesn't matter how much the asset shifts, your broker will still make a financial profit. The spread is shown as a "pip", which is usually the last decimal point in the price.

Here is an example of a spread in trading:

  •     The purchase price of the share is £200.00, the selling price of the same share is £201.00 - The spread (percentage difference) is 0.5%.
  •     If the trader now bids on the same share and pays £201, you can only ask for £200.00.
  •     In this scenario you need to make at least a 0.5% profit to break even. Anything above this is classed as a profit. 

Especially when day trading, the spread can be your worst enemy. Therefore, always look for trading platforms that can offer tight spreads. If you don't, you may find that the spread can eat away at your potential profits.

Trading commission fees

In addition to the spread, another important part of your day trading strategy should be to find out about the broker's commission fees.

Many trading platforms actually offer 0% commission trades. Just be wary that some platforms may have a higher spread to compensate for the lack of commission you will pay. So always weigh up the commission fees against the spread. If commission fees are charged, they must also be paid when buying and selling.

Withdrawal / deposit fees

It may be that some brokers offer free withdrawals, while others may charge a small fee. Ultimately, it will depend on which broker you trade with.

It's also worth noting that the payment method you use to deposit can sometimes be the difference between hours and days before your money reaches your trading account. For this reason, it is recommended to use an instant payment method, such as a debit / credit card or an e-wallet. 

















































































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