Where should I place my Stop-Loss and Take-Profit orders?

As a general rule of thumb, traders should set Stop-Loss orders closer to the opening price than Take-Profit orders. If this rule is followed, a trader needs to be right less than 50% of the time to be profitable. For example, a trader who uses 30 pip Stop-Loss and 100-pip Take-Profit orders, needs to be right only one-third of the time to make a profit. Where traders place Stop-Loss and Take-Profit orders will depend on how risk-averse they are. Stop-Loss orders should not be so tight that normal market volatility triggers the order. Similarly, Take-Profit orders should reflect a realistic expectation of gains based on the market's trading activity and the length of time one wants to hold the position. When initially setting up a trade, it is prudent to look to change the Stop-Loss and set it at a rate in the “middle ground” where you are not overexposed to the trade, and at the same time, are not too close to the market.

Trading foreign currencies is a demanding and potentially profitable opportunity for trained and experienced investors. However, before deciding to participate in the Forex market, you should soberly reflect on the desired result of your investment and your level of experience.