Finance & Business
Is loss limitation possible?
Yes, it is possible to settle each traded order in currency trading with a loss limit. The loss limit refers to the limit up to which the trader takes a risk of loss. Currencies are bought or sold up to a certain limit. If this corresponding limit is exceeded or not reached, the order will not be executed. This type of order with loss limitation is called a limit order. In particular, investors who do not have the opportunity to monitor their positions continuously throughout the day resort to this order option. This way they can safely execute their trading activities without constantly keeping an eye on the performance of their exchange rates. If, in the period between placing and executing the order, a price trend occurs that is disadvantageous for the investor, the possibility of loss is efficiently prevented by the order stop when the loss limit is reached. However, buying shares, for example, is by far not as risky as trading foreign exchange with leverage.