How will you explain stop loss & take profit to a beginner forex trader?

@chaka_muanzi - 8 months ago - Forex Tools & Resources

Okay, I know these a fairly common concepts but how do you explain what is stop loss and take profit to a novice forex trader?

@patrinova_athenia - 8 months ago

Halo there!

If I were talking to a beginner I would explain a stop loss as the highest amount of money you want to lose

I would also define a take profit as the highest amount of money you intend to make on a trade.

Beginners should keep in mind that while a take profit can be infinite, a stop loss is finite because it depends on your account balance. You cannot set a stop loss that is bigger than your account balance.