A "Close at Loss Order" (or Stop Loss Order) at FNmarkets helps you manage risk by automatically closing a trade when the market price reaches a level you set. Here’s a detailed explanation:
1. Purpose: The main goal is to limit your potential losses on a trade.
2. How It Works: You decide the maximum amount you are willing to lose on a trade. You set a price level, and if the market price hits that level, your trade will automatically close.
3. Example: Suppose you buy a stock at $100. You set a Stop Loss Order at $90. If the stock price drops to $90, the order will trigger, and your position will close automatically. This prevents you from losing more than $10 per share.
4. Benefits: This tool helps you manage your risk without needing to constantly monitor the market. It gives you peace of mind by ensuring that losses are kept within a predefined limit.
5. Usage: Stop Loss Orders are commonly used in volatile markets where prices can change rapidly.
By using Stop Loss Orders, you can protect your investments and manage your trading risks effectively.