Axi is regulated by multiple financial authorities in the world, including the Financial Services Authority in St Vincent and the Grenadines and Financial Conduct Authority in the UK.

As a retail client, you can enjoy the greatest protection with rules and regulations imposed by the Financial Conduct Authority (FCA) and the European Securities and Markets Authority (ESMA) designed to ensure you are given every opportunity and assistance when trading in financial markets.

Under rules introduced by ESMA, which all FCA regulated firms must adhere to by 1st August 2018, a Retail Client has Negative Balance Protection (NBP) meaning they cannot lose more than they have deposited with a broker.

On the other hand, Axi regulated by the Financial Services Authority in St Vincent and the Grenadines, does not support NBP for retail traders.

If you are trading with Axi regulated by FSA, you need to be careful when trading especially during news time to avoid possible stop out.

To find out under which regulation you can open an account, go to Axi’s Official Website.

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In this article, we introduce you how to limit your losses with 3 effective strategies.

Stop Loss Trading – 3 Methods to Limit Forex Losses

One of the fundamental rules of trading in the foreign exchange market is the placement of Stop Loss safety orders.

This is necessary in order not to lose your entire deposit or a significant part of it.

Many beginners still neglect this rule, quickly losing their funds. Then they become disillusioned with trading and are absolutely convinced that it is impossible to make money in this way.

However, there are still methods of trading without protective orders.

Such methods provide for the protection of capital on deposit in various ways.

Position hedging method

The standard rules for placing protective orders sometimes work against traders.

All market makers are well aware that traders place stops on open positions slightly above or below trend flow, taking into account possible levels of support/resistance.

It is often possible to observe how at the beginning of a trading session or any market movement, the price of an asset makes a sharp jump in the opposite direction, and only then moves in the other direction.

It is in this way that the main market participants knock out stop losses of ordinary investors, closing their positions at a loss for them.

Position hedging is considered to be an effective trading technique.

The method involves opening another position, but in the opposite direction.

Moreover, the newly opened order must have the same volume as the previously opened order.

Thus, a kind of lock is created that does not allow the loss to increase.

There are several ways to properly open the hedging position and minimize the resulting losses. You can open an immediate execution order or a pending order.

On the example of the GBPUSD asset, the hedging technique is clearly demonstrated.

Initially, a sell order (SELL) was opened, but the price turned in the opposite direction.

In order not to let the loss grow further, a BUY order was opened. Now the orders overlap each other. A hedging has been created.

There are several ways to open a hedging position. In this situation, it is clear that the best option would be to immediately close a short position, and fixing profits with a long position.

However, not everything always goes as smoothly as in the above graph.

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Position reversal method

This method is similar to the previous one, but differs from it in that the deal opened in the opposite direction has a larger volume than the previously opened one.

Similarly, with the position hedging method, immediate execution or pending orders are opened.

The reversal method is best used when trading using price levels.

In this case, a more clear picture of the possible dynamics of the trend movement emerges in front of the investor on the asset chart.

Opening a hedging order with a large volume should cover all losses.

The above image shows how two long positions of 0.1 lot were unsuccessfully opened.

When the price crosses the 2nd level from top to bottom, after the bullish candle closes, a hedging short position is immediately opened, but with a volume of 0.3 lots.

It can be closed after the price rebounds from the 1st level, making a profit or at least breakeven.

Then the previously opened long positions begin to give profit.

As a result of a clear analysis, using support and resistance levels, trading can bring good profits.

In this situation, opening a SELL order with a volume of 0.3 lots makes it possible to wait out an unfavorable market period.

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Averaging method

The averaging strategy also provides for minimizing losses from an unsuccessfully opened position or completely liquidating a loss.

This is achieved by averaging the entry into the market with an order or orders opened in the direction of the very first position.

The averaging method can be considered on a specific example of the GBPUSD asset.

The chart shows that the initial entry into the buy trade was unsuccessful.

The price reversed and went in the opposite direction.

It was possible to close this long position by Stop Loss, but there would have been losses.

The averaging method provided for opening an order with the same volume and in the same direction, when the price rebounds from the 1st level.

The subsequent development of events showed that the chosen averaging strategy justified itself.

The figure shows options for closing orders, eloquently confirming not only the minimization of losses, but also the possibility of obtaining a good profit, the maximum size of which was 705 points.

In this case, the averaging trade was opened with the same volume as the first one.

But sometimes the Martingale strategy is used in the position averaging method.

It provides for the opening of the following orders (through certain distances) in the same direction, but with an increase in the volume of each subsequent position.

It should be noted that this method of trading requires the investor to observe the highest self-discipline and scrupulous assessment of their own risks.

All of the above trading methods have been tested by experienced traders in practice.

A novice investor, before starting to trade with real money, should definitely check the described methods on a demo account, and then, preferably, on a cent account.

This will allow you to feel more confident when trading with a large deposit.