There is nothing worse than watching your trade be up with green pips for a while and see it completely reverse quickly later and take out your stop points lower.
Almost all FX traders has experienced this feeling firsthand, and if you didn't consider yourself lucky - it's a woe most traders face more often than you can imagine and is a perfect example of poor money management.
The markets can move fast, with gains turning into losses in a matter of minutes, making it critical to properly manage your capital.
One of the important rules of trading is to protect your profits - even if it means banking only few pips. Taking multiple trades with few pips at a time, that adds up to a respectable profits, this approach may seem like trading like slowly, but we must remember that the main point of trading is to minimize losses and along with that to make money as often as possible.
The most used and easiest way to not let a winner turn into a loser is to trail your stop loss level to breakeven point as soon as you have a good amount of pips (far enough from the entry point to not affect the open position by the market nose). This method can be enhanced by trailing again and again the s…