How to Set Stop Loss Orders in MetaTrader 5 (MT5)

How to Set Stop Loss Orders in MetaTrader 5

Setting Stop Loss Orders in MetaTrader 5

How to Set Stop Loss Orders in MetaTrader 5: Forex trading can be a rollercoaster ride, with prices fluctuating rapidly. As a forex trader, it’s crucial to protect your capital and manage risks effectively. One powerful tool at your disposal is the stop loss order. In this article, we will explore what stop loss orders are in the context of FX trading, discuss the importance of using them, provide step-by-step instructions on setting up stop loss orders in MetaTrader 5 (MT5), present an example of a stop loss order in action, and explore different types of stop loss orders commonly used in forex trading. Let’s dive in and master the art of setting stop loss orders in MT5!

What is a stop loss order in FX?

A stop loss order is a risk management tool used in forex trading. It is an instruction given by a trader to their broker, specifying the price level at which a position should be automatically closed to limit potential losses. By setting a stop loss order, traders can define their maximum acceptable loss and protect their trading capital from excessive downturns.

Should I use stop loss in forex trading?

Absolutely! Incorporating stop loss orders into your forex trading strategy is strongly recommended. Here’s why:

  1. Limiting losses: Stop loss orders allow you to define the maximum amount you are willing to lose on a trade, protecting your capital from significant downturns.
  2. Emotional control: By setting predefined exit points, stop loss orders remove emotional decision-making from the equation, helping you avoid impulsive actions.
  3. Consistency: Stop loss orders promote consistency in your trading approach. They ensure you adhere to your risk management plan and avoid deviating from your strategy.

How do I set up a stop loss order in MT5?

Setting up a stop loss order in MT5 is simple and straightforward. Follow these steps:

  1. Open MT5 and navigate to the “Market Watch” window.
  2. Right-click on the desired currency pair and select “New Order.”
  3. In the “Order” window, enter the desired trade volume and select “Sell” or “Buy” to specify your trading direction.
  4. Below the price chart, you will find the “Stop Loss” field. Enter the desired stop loss level.
  5. Once you’ve entered the stop loss level, click on the “Sell” or “Buy” button to execute the trade with the stop loss order in place.

What is an example of a stop loss order? Let’s consider an example: You decide to buy 1 lot of EUR/USD at 1.1500. To limit potential losses, you set a stop loss order at 1.1450, which is 50 pips below your entry price. If the market moves against your position and reaches 1.1450, your stop loss order will trigger, and your trade will automatically be closed, limiting your loss to 50 pips.

Types of stop loss orders in forex trading:

  1. Regular Stop Loss Order: This is the most common type of stop loss order. It is executed as a market order when the specified price level is reached. The trade is closed immediately at the prevailing market price.
  2. Trailing Stop Loss Order: A trailing stop loss order adjusts the stop loss level as the trade moves in your favor. It trails the price at a specified distance, allowing for potential profit-taking while still protecting against reversals.
  3. Guaranteed Stop Loss Order: Some brokers offer guaranteed stop loss orders. These ensure that the trade is closed at the exact specified stop loss level, even if there is a sudden market gap. However, this type of order may involve additional costs or wider spreads.


Stop loss orders are indispensable tools for managing risk and protecting your capital in forex trading. Using stop loss orders helps you define your maximum acceptable loss, maintain emotional control, and ensure consistency in your trading approach. By following the step-by-step instructions in MT5, you can easily set up stop loss orders for your trades. Remember to choose the appropriate stop loss level based on market analysis and consider different types of stop loss orders to align with your trading strategy. Mastering stop loss orders in MT5 empowers you to navigate the forex market with confidence and safeguard your trading capital.