JustMarkets is a renowned online trading platform that has garnered considerable attention from traders and investors around the world. The platform provides a range of tools and features to facilitate trading, and one such feature that often piques the interest of traders is the guaranteed stop loss order.
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What is a Stop Loss Order?
Before delving into the realm of guaranteed stop loss orders, it’s crucial to understand what a regular stop loss order is and how it functions. A stop loss order is an essential risk management tool used by traders in the financial markets. It allows traders to set a specific price level at which they want their trade to be automatically closed if the market moves against them.
For instance, if you buy a stock at $100 and set a stop loss order at $90, your position will be automatically sold when the stock’s price reaches or falls below $90. This limits potential losses and helps traders adhere to their risk management strategies.
Guaranteed Stop Loss Orders: A Deeper Dive
While regular stop loss orders are widely used, they come with a limitation – slippage. Slippage occurs when the market moves rapidly, and your trade is executed at a price worse than your specified stop loss level. This can happen in volatile markets or during after-hours trading, potentially leading to greater losses than anticipated.
To address this concern, some brokers offer a specialized tool known as a “guaranteed stop loss order.” A guaranteed stop loss order ensures that your trade will be closed at the exact price you specify, regardless of market volatility. This means that, even in the most tumultuous market conditions, your losses are limited to the predetermined amount.
JustMarkets and Guaranteed Stop Loss Orders
Now, let’s explore whether JustMarkets offers guaranteed stop loss orders to its users. JustMarkets is known for its commitment to providing a robust trading environment with advanced features. However, it’s important to note that not all brokers offer guaranteed stop loss orders, and their availability may vary.
JustMarkets did offer guaranteed stop loss orders to its clients. This feature provided traders with an additional layer of security and risk management. However, please keep in mind that the offerings and features of online brokers can change over time, so it’s essential to verify the current status of guaranteed stop loss orders on the JustMarkets platform by visiting their official website or contacting their customer support.
The Advantages of Guaranteed Stop Loss Orders
Guaranteed stop loss orders come with several advantages that can benefit traders in various ways. Let’s take a closer look at some of these advantages:
- Risk Management: The primary purpose of stop loss orders is to manage risk. With guaranteed stop loss orders, you can precisely control the maximum loss you are willing to accept on a trade. This is particularly beneficial for traders who engage in high-stakes or leveraged trading.
- Protection in Volatile Markets: In extremely volatile market conditions, price gaps and rapid fluctuations can occur. Guaranteed stop loss orders shield traders from the impact of such market turbulence, ensuring that their trades are executed at the intended price.
- Peace of Mind: Traders who use guaranteed stop loss orders can trade with greater peace of mind. Knowing that their potential losses are capped at a predetermined level, they can focus on their trading strategy without being overly concerned about sudden market movements.
- Accurate Risk Assessment: Guaranteed stop loss orders make it easier to assess the risk-reward ratio for a trade accurately. Traders can plan their trades with precision, knowing the exact amount they stand to lose if the trade goes against them.
Limitations of Guaranteed Stop Loss Orders
While guaranteed stop loss orders offer significant advantages, it’s essential to be aware of their limitations as well:
- Higher Costs: Brokers that offer guaranteed stop loss orders often charge a premium for this service. Traders should consider the cost-effectiveness of using guaranteed stops, especially for trades with narrow profit margins.
- Availability: Not all brokers provide guaranteed stop loss orders. This limitation means that traders must choose a broker that offers this feature if they wish to use it.
- Minimum Distance: Some brokers impose a minimum distance requirement for guaranteed stop loss orders. This means that the specified stop loss level must be set a certain number of pips or points away from the current market price. This can limit the precision of your risk management.
Using Guaranteed Stop Loss Orders Effectively
To make the most of guaranteed stop loss orders, traders should follow these best practices:
- Choose the Right Broker: If guaranteed stop loss orders are a priority for your trading strategy, ensure that you select a broker that offers this feature. Research and compare brokers to find the one that aligns with your needs.
- Assess the Cost: Understand the cost associated with guaranteed stop loss orders. Consider whether the potential benefits in terms of risk management outweigh the additional expenses.
- Set Realistic Levels: When setting guaranteed stop loss levels, make sure they align with your overall risk management strategy. Setting levels too tight can result in premature trade closures, while setting them too wide may expose you to greater losses.
- Stay Informed: Keep yourself informed about the market conditions and news events that could impact your trades. Even with guaranteed stop loss orders, unexpected developments can lead to significant price gaps.
Conclusion
In conclusion, guaranteed stop loss orders are a valuable tool for traders seeking enhanced risk management and protection from market volatility. JustMarkets did offer this feature to its clients. However, I strongly recommend verifying the current status of guaranteed stop loss orders on the JustMarkets platform to ensure accuracy.
When using guaranteed stop loss orders, it’s important to weigh the advantages against the associated costs and limitations. Additionally, traders should employ these orders in a manner that aligns with their overall trading strategy and risk management goals. As with any trading tool, understanding its functionality and using it judiciously is key to success in the financial markets.
