Two simple tools that decide your exit before emotion does.
Stop Loss (SL) and Take Profit (TP) are conditional orders you attach to a position. They tell the platform: if price hits this level, close the trade automatically. They are the simplest, most important risk-management tool on any trading platform.
Stop Loss (SL)
A Stop Loss closes your position at a loss when price moves against you by a set amount. It caps how much you can lose on a single trade.
Example — Buy EUR/USD at 1.0900
- You set SL at 1.0850 (50 pips below entry).
- If price drops to 1.0850, your position closes automatically.
- Maximum loss: 50 pips × your lot size, regardless of what happens next.
Take Profit (TP)
A Take Profit closes your position at a profit when price moves in your favour by a set amount. It locks in gains without you needing to be in front of the screen.
Example — Buy EUR/USD at 1.0900
- You set TP at 1.0980 (80 pips above entry).
- If price rises to 1.0980, your position closes automatically.
- Profit: 80 pips × your lot size.
How to Set SL and TP on MT5
When opening a new trade
- Click New Order.
- Choose your instrument and lot size.
- In the Stop Loss and Take Profit fields, enter the price levels (not the pip distance).
- Click Buy or Sell.
On an existing position
- Right-click the position in the Trade tab → Modify or Delete Order.
- Enter or update the Stop Loss and Take Profit prices.
- Click Modify.
Tip: MT5 will reject SL/TP levels that are too close to current price (the minimum stop level depends on the instrument). If you see "Invalid S/L or T/P", widen the level by a few pips and try again.
Why They Matter
- They turn a possible loss into a known maximum loss.
- They remove the emotion of holding a losing trade hoping it turns.
- They protect you when you're away from your screen — overnight, during news, or over the weekend.
Common Mistakes
| Mistake | Better approach |
| Setting SL too tight | Use a level beyond normal market noise — for example, just past a recent swing high/low. |
| Moving SL further away when price approaches it | The level you set was your plan. Moving it lets a small loss become a big one. |
| Trading without SL on volatile instruments | Always use SL on crypto, gold, indices and around major news. |
| TP too greedy | If TP is unrealistic, you may give back profit when price reverses. |
Trailing Stop
MT5 also offers a Trailing Stop. It moves your SL automatically as price moves in your favour, locking in unrealised profit. To enable, right-click an open position → Trailing Stop → choose distance in points.
Note: Trailing Stop only runs while MT5 is open on your device. If you close the terminal, the trailing logic stops — but the last SL level it set remains active on the server.