🎓 ** Explanation of Stop Loss and Take Profit
(With practical examples that any beginner can understand)**
The biggest mistake traders make is entering a trade without an exit plan…
Therefore, learning these two concepts will completely change your level:
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🟥 1) Stop Loss — Safety Valve
It is a price level at which you tell the platform:
"If the price reaches here… exit me immediately"
❗ Why do we use it?
To prevent significant losses that could destroy the account.
✔ A simple and useful example:
You bought a currency at a price of $10
The strong support area is $9.30
If support is broken → the idea ends.
So:
Set the stop loss at $9.28
(Slightly below to avoid false touches)
⸻
🟩 2) Take Profit — Locking in profits before they fly away
It is a level you set to sell part or all of the trade at.
❗ Why do we use it?
To avoid greed… and to secure actual profit.
✔ A clear example:
You entered at $10
The nearest strong resistance is at $11.40
Set the take profit at:
$11.35
(Slightly before the resistance)
⸻
🟦 3) The golden rule that no one talks about:
✦ Set the stop loss where your idea ends… not where your patience ends.
✦ Set the take profit at a pressure area, not at a number you “like”.
⸻
📌 A professional plan ready for beginners:
Upon entry:
• Define the reason for entry
• Define the breakout area → SL
• Define the nearest resistance/logical target → TP
During the trade:
• Do not change the stop loss further away
• You can raise it higher when in profit (Trailing Stop)
