By Kathleen Brooks, Brian Dolan

When you’ve identified a trade opportunity and developed a risk-aware trading plan, you’re going to have active orders out in the market to cover your position one way or the other (stop-loss or take-profit). Depending on your trading style and the trade setup, you can reasonably follow a set-it-and-forget-it trade strategy where your orders will watch the market and your position for you.

Medium- to longer-term traders are more likely to rely on set, or resting, market orders to cover open positions due to the longer time frame of such trade strategies and the burdens of monitoring the market overnight or for longer stretches of time.

Remember to use rate alerts to update you on specific price movements. The archetypal picture of the currency trader sleeping with a phone under the pillow is not really that far off. Depending on how your trade is developing, you can make order adjustments typically in a matter of seconds or minutes and get back to sleep (or whatever it was you were doing).

Shorter-term traders are more likely to follow a more dynamic approach, again based on the shorter time frame of such trades. Short-term traders are more apt to be in front of their trading monitors or using their smartphone trading apps while their trades are still open, but they should always still have an ultimate limiting set of orders to cover the trade strategy.

You may want to be flexible with where you leave your take-profit order, but always have a stop-loss order in place to protect you in case of unexpected news or price movements. If you’re trading the market from the long side (meaning, you think prices in a currency pair are likely to move higher), you need to pinpoint the ultimate price level on the downside, which negates this short-term view.