A stop loss (SL) and take profit (TP), are price levels that you can set depending on whether you are minimising the loss or taking the profit. These levels are important for day to day forex trading because the markets can experience high levels of unpredictable volatility at anytime. When the price hits your take profit or stop loss, it will automatically close the trade.
Adjusting Stop Loss Into Profit
It is a popular practice to adjust your stop loss into profit when the price has gone far enough in the direction you originally predicted. This essentially removes the risk from the current investment and guarantees that you will close off in profit if a reversal or unexpected price move takes place. To adjust your stop loss into profit, click on the trade and modify the level to a few pips into profit or past your entry line.
Whist putting this into practice helps reduce your losses, it may also affect your profits if you adjust the stop loss into profit too early. Always use price action and other charting techniques to decipher a safe area to adjust this level without affecting the outcome of your trade.