Due to the fluctuating nature of the forex market, there’s an inherent risk in any trade that it could go against you. To hep reduce that risk and protect your capital, there are two key tools commonly used by traders. Stop Loss is a predefined level – set by you when you place your trade – at which a trade will automatically close. This helps you to avoid experiencing a loss more than what you’re comfortable accepting. Take Profit works in a similar way, but instead of being there to protect losses it is set to lock in profits once a predetermined target has been met. While taking a profit early may prevent you claiming even higher profits, it will also ensure you don’t drop below your accepted level.