I want to share some basic knowledge about trading that many newcomers to the market might not fully understand, especially what entry is and why it is important.

Entry in forex or any other market is your order entry point. Simply put, it is the price at which you decide to start buying or selling an asset. If you enter a trade and then close the trade exactly at that entry point, basically you break even, with no profit or loss.

But what really matters is not just the entry, but how you manage risk after entering the trade. That is where Stop Loss and Take Profit come in. I see many new traders overlook these two things, and that is a big mistake.

Stop Loss is the automatic closing of your order if the market moves against you. When you buy, the Stop Loss must be below the entry; when you sell, the Stop Loss must be above the entry. Absolutely do not set the Stop Loss too close to the entry because markets often fluctuate strongly, and you might get stopped out only for the market to turn back. I have experienced this situation many times.

Take Profit, on the other hand, helps you automatically lock in profits. When buying, the Take Profit must be above the entry; when selling, it must be below the entry. A good tip is to set the Stop Loss closer than the distance from entry to Take Profit. This way, you might lose a few trades, but the winning trades will compensate for them.

The benefits of pre-setting Stop Loss and Take Profit are very clear. First, it saves time because you don’t need to constantly monitor the trades. Second, it reduces psychological pressure when trading, giving you peace of mind knowing your risks are controlled within an acceptable level, usually around 0.5% to 1% of your account. Third, it optimizes long-term profits.

However, there are also some disadvantages to consider. Sometimes, during strong market volatility, you might get stopped out only for the market to return to the entry point or even surpass the Take Profit. There are also times when your position looks perfect, hits the Take Profit, but the price continues further, and you might regret it. But despite these potential risks, setting Stop Loss and Take Profit remains extremely necessary, especially when trading Futures, because without Stop Loss, you could blow your account in an instant.

When you start trading more professionally, Stop Loss and Take Profit are two essential tools you must use for every trade. They not only save time but also create discipline and efficiency in trading. Eat less but eat long-term; that is the key to success in this market.