Learn Futures Terminology
ADDITIONAL NOTES:
Stops order are also used to protect profits. So you should
be able to raise them as the market moves in your favour.
For example: You bought 7 contracts of Feb Gold at 300.
Now the price moved to 320 and you are profiting $14,000(7
Contracts*20*$100 a Point). Initially, you have placed a
stop at 2.92 to limit your loss. You can call your broker
(or do it your trading system) a move a stop. For example:
Please cancel my Feb Gold stop at 292 and move it to 315.
If the trend keeps on going in your favour you can keep
on moving the stop to maximize your profit.
OCO orders can be used in a number of different fashions.
You can place entry orders, like Buy 7 March 2003 Japanese
Yen at 83.00 Stop Stop OCO Sell 7 March 2003 Japanese Yen
82.50. Assuming the price is in between, you will be able
to buck the trend if the break out prices you chose are
correct. Also you can place a protective stop and profit
target at the same time.
Lets say you are holding a Feb 2003 Gold contract that
you have bought at 300- you could place the following order
Sell 7 Feb 2003 Gold at 2.96 on a Stop OCO Sell 7 Feb 2003
Gold at 315 Limit.
Stop loss orders may not limit your losses to the amount
intended. Certain market conditions may get difficult or
impossible to execute such orders. You should be aware that
there is a risk of loss in futures trading.
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