There are multiple risk factors in trading, and navigating them requires patience and experience. To alleviate that pressure, modern trading platforms offer some highly practical tools that help to manage risks and avoid losses. Unfortunately, many traders are either unaware of these tools or have got used to trading without them. In this article, the experts at Octa, a globally regulated and trusted broker since 2011, break down some noteworthy features that seasoned traders use to mitigate the risks and improve their outcomes.
Common challenges
Trading can be a very intense experience. Each trade puts knowledge and skills to the test, creating a decisive stress factor. It’s like taking an exam with a limited time over and over, but the test questions and conditions are different each time.
Octa leverages its extensive market experience to offer transparent trading conditions and fast, reliable withdrawals. The broker’s trustworthiness and transparency reduce the cognitive load involved in trading and allow traders to fully concentrate on their performance.
The tools at hand
Any trader strives to get additional income with each session, and the high significance of financial outcomes can get on their nerves. Luckily, modern trading platforms have a few simple yet efficient tools that help to automate the routine and improve outcomes.
To simplify the trading process, Octa broker creates a reliable, secure trading environment and introduces accessible and efficient features to its platform. Below are some of the tools any trader should consider to achieve more consistent results.
1. Stop loss and take profit
Stop-loss and take-profit orders are by far the most popular and accessible risk management tools in trading. These tools automatically close a position once it hits a predefined mark, either cutting losses or locking in gains—just as their names suggest.
Most trading tutorials emphasise the importance of regularly using these orders as part of the risk management routine. However, Octa broker’s survey showed that between 29% and 35% of traders apply risk management tools only when attempting a hazardous trade. In most cases, they trust their trading intuition to exit the trade on time. Unfortunately, this approach is risky and can cause significant losses. Remember, risk management tools are there to be used.
2. Trailing stop and break even
These tools allow traders to set up dynamic, market-sensitive exit points to secure the gains already made in a trade. While a standard stop-loss order is static and usually applied at the initial stage of a trade, trailing stop automatically adjusts the exit level as the market price moves in the trader’s favour, protecting profits while giving the trade room to run.
Similarly, a break-even order moves the stop-loss level to the trade’s entry price (or slightly above or below to cover commissions or fees) once the price has moved a predetermined amount in the trader’s favour, thereby eliminating the risk of financial loss on that particular trade.
These tools automatically close the position at a certain price level to protect profits, allowing traders to set up a dynamic, market-sensitive stop-loss order. While a standard stop-loss order is static, both trailing stop and break-even orders follow the price as long as it moves in favour of the open position.
Octa broker highly recommends these intuitive and flexible tools available on the broker’s proprietary platform. They offer greater control over open positions, reduce stress, and enhance resilience in unpredictable market conditions.
3. Notifications and calculators
However basic, math in trading is always present as a hidden but instrumental mechanism, and a solid understanding of it remains crucial. Modern trading platforms offer dedicated features to automate calculations and reduce cognitive load.
For example, position sizing algorithms and automated margin calculators help traders maintain the needed level of exposure. They take into account the user’s current equity amount and desired risk tolerance. An automated tool can calculate how many lots to trade within a specific currency pair so that no more than 1% of the account balance is at risk on any single trade. Maintaining this disciplined and detail-focused approach manually would be very cumbersome, but luckily, the appropriate tools can streamline the process.
On the other hand, automated alert systems provide a psychological safety net for emotional traders who are prone to anxiety. These systems monitor charts around the clock and notify traders when specific setups or market conditions emerge. Instead of staring at screens for hours, traders who use such tools can focus on strategy refinement or other analyses, knowing they won’t miss critical entry or exit opportunities.
Modern risk-management tools allow for easier and less nerve-wracking sessions while improving overall outcomes. Brokers that wield technology and offer their clients the most accessible, up-to-date solutions create a link of trust and understanding that helps both brokers and traders reach their respective goals. With this in mind, Octa broker recommends choosing a trusted and proven broker, rather than one that simply makes the most promises.
