The trailing bot works to put into effect the trailing stop orders as needed in a forex transaction. So, simply put, the trailing bot is a robot, what then is a trailing stop order?
WHAT IS A TRAILING STOP ORDER?
The forex market is full of risks, and quite frankly, there is no way to avoid the as a trader. The best that one can ever do is to try to minimize the risks and hope for the best. While there are risk management procedures for trading the forex market, there are also advanced risk management procedures too; one of which is the trailing stop loss.
Basically, the trailing stop loss order is an option that can be opted for to allow already achieved profits be locked up while the market is moving favorably. Anyone that has been in the forex market for a while may understand that there are cases where one may have to do away with a little bit of your profits (not necessarily your trade capital) for the sake of the greater good; a hopeful insinuation. If everything turns out good and the greater good is achieved, that is good; but certainly, there are cases where things end up in a very big disappointment and losses are accumulated instead of profits. One might just keep hoping that things turn around out of greed and emotions, but it does not always work out all the time. This is one of the reasons traders are advised to keep their emotions in check any time they are in the forex market. Seeing as it is a difficult task to do so, some trading tools were developed to help traders keep their emotions in check and minimize risk exposure to the greatest minimal level possible.
When the market is moving favorably, the function of the trailing stop loss bot is to lock up all the profits that has been accumulated so far in the process and go right ahead to keep them in a place that they cannot be tampered with.
THE MULTIPLE STOP LOSS OF THE TRAILING BOT
The trailing stop bots is compatible with the MT4 trading platform, and functions by setting multiple stop loss points with a fixed point gap in between. The aim of the multiple stop loss is to check if the trade is going favorably or not. When trades are going well, the stop loss levels are passed by the robot, and with each level passed, a new dominant profit lock is established to lock in the profits gained in the trade so far.
The content of this article reflects the author’s opinion and does not necessarily reflect the official position of LiteForex. The material published on this page is provided for informational purposes only and should not be considered as the provision of investment advice for the purposes of Directive 2004/39/EC.