Risk Management Control and Order Types
Use risk management tools to control your open positions and protect yourself against sudden changes in market conditions.
Buying and Selling at Market Prices
Trade a variety of CFDs with Absolut Ability, your leading Forex and CFDs online broker. We give you complete access to the markets so that you can buy and sell instruments at the current market price. You buy or sell a CFD at the midpoint of the price point spread that’s set for each individual instrument you want to trade.
Absolut Ability provides different order types within our award-winning trading platform. We provide you with Limit Orders so that you can keep and gain control over your risk management. A smart trader is a trader who manages their risk accordingly.
What is a Stop Loss?
A Stop Loss is a risk management order type which provides you with an excellent way to prevent you from experiencing huge losses should the instrument you’re trading move in the opposite direction.
The Absolut Ability Stop Loss order instructs our trading platform to close a position when the price point of the said instrument reaches a specific market price.
Let’s say you purchased 200 Google share CFDs at $540. You can set your Stop Loss to execute when the Google share prices falls to $510. If this happens, and the Google share prices falls to $510, your position will automatically close. Please be aware that during extreme volatility, you might not receive the exact price that you were expecting, but our trading platform will close the position as close to your Stop Loss price as possible. When this happens, we call it slippage. We’ve equipped our trading platform to limit slippage as much as possible.
You can also use a Stop Loss order to protect your profits. How? You can manually change the market price of the Stop Loss to lock in your profits. Let’s say that you purchased Google share CFDs at $540 per share and set the Stop Loss at $510, but the price per Google share rose to $570 per share, you can change the Stop Loss to $565, thus protecting the profit you have made.
What is a Take Profit Order?
View the Take Profit order as being the opposite of a Stop Loss in that you instruct the Absolut Ability trading platform to close your position at a specific price point. Let’s say you buy Google share CFDs at $540. You set the Take Profit at $560. When the price of Google’s shares hits $560, your position is closed and you can retrieve your profits.
It’s really important to note that under abnormal market conditions, CFDs can rise and fall dramatically. This is normally caused by extreme market volatility. If this event happens, this cannot be controlled by the Firm or by you. If this happens, your Stop Loss or Take Profit orders may not be triggered. This is called negative slippage. Knowing this, a Stop Loss cannot guarantee that your losses will be limited.
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