Stops, Targets, Modifications and Partials

Second Officer · SO02: Placing and Managing Orders · About 25 minutes

Safety rule: A stop-loss is an exit instruction, not insurance that the exact planned loss will be your final loss.

Your mission today

By the end you can modify a demo position safely and reconcile its stop, target and partial closes with the trade history.

Before you start

Complete SO02.3 and open a demo account. You should know which panel displays filled positions and which displays outstanding orders. Use simulated or demonstration trades only.

1. Stops and targets are different instructions

Imagine a bicycle rider deciding two things before leaving: the point at which the route is too dangerous, and the place where the ride should end. The rider still needs to watch the road. A plan cannot prevent every surprise.

A stop-loss tells the trading system to seek an exit after a stated price condition. The actual fill can be worse than the requested level during a gap or fast move.

A take-profit is an instruction to seek an exit at a favourable price condition, subject to product rules and availability. A target does not guarantee that the market will go there.

For a conventional long forex position, the stop and target are commonly evaluated against the Bid. For a short, Ask typically matters. Confirm the rules for your exact instrument and account.

2. Worked example: when the stop fills worse

Use imaginary EURUSD figures.

• A demo Buy fills at Ask 1.0842.
• Your planned stop is 1.0827.
• Your hypothetical volume is worth $1 per pip.
• The intended distance is 15 pips.

The planned price loss is 15 × $1 = $15, before fees.

Now suppose the stop triggers at its level but the executed exit is 1.0824. The total adverse distance is 18 pips. The realised price loss becomes $18, before separate costs.

The stop was not "wrong" because the fill differed. It was an order subject to market execution. You must measure the actual result, not quietly record the prettier planned number.

For contrast, if price later reached a hypothetical exit of 1.0862, the favourable distance from entry would be 20 pips, or +$20 before fees. The possibility of such an exit does not make the initial stop risk disappear.

Original Black Box Journey teaching illustration. Synthetic example; not historical market data.

3. Modifying a position needs confirmation

A modification changes an existing order or protective level. On a live server, a request can be refused if it violates minimum distances, trading hours or other rules.

In demo, practise changing a stop only for a reason allowed by your written plan. Never widen a stop because a losing position makes you uncomfortable.

After each change, verify the active stop and target shown by the platform. The request you sent may differ from what the server accepted. Record the old value, new value, time and reason.

A move to breakeven means placing the stop around your entry level. It does not promise a zero-cash outcome. Spread, commission, gaps and slippage may still create a loss.

4. What changes when you close only part?

A partial close exits only some of an open position. If you start with an imaginary 0.10 lot and successfully close 0.04 lot, the remaining volume is 0.06 lot, assuming your account and instrument support that operation.

Your realised result on the closed portion becomes part of account history. The remaining portion still carries market exposure.

Some brokers use netting accounts, where deals adjust one combined position for a symbol. Others use hedging accounts, where several positions can be kept separately. In some account types, sending an opposite order does not do what a beginner expects. Use the platform's documented close-position command in demo.

After a partial close, reconcile the deal volume, remaining exposure, stop quantity and total cash result. A reduced lot size is not a licence to forget the remaining risk.

5. Make an amendment log that can be audited

For every demo change, capture:

1. Original position ticket, symbol and volume.
2. Previous stop and target levels.
3. Why the change is permitted by the plan.
4. Requested amended level or partial close quantity.
5. Server response and executed deal, if any.
6. Remaining volume and revised downside.

If a broker rejects the change, do not pretend it succeeded. The current exposure still exists until you have confirmed otherwise. Follow the documented recovery procedure in SO02.5.

Common mistake

A learner moves the stop to entry price and writes "risk free." Actual exits depend on spreads, fills and fees. Fix it by describing the position as planned breakeven, not guaranteed zero loss.

Plain-English glossary

• Stop-loss: An instruction to seek an exit after a price condition.
• Take-profit: An instruction to seek an exit after a favourable condition.
• Modification: A requested change to an existing order or position.
• Partial close: Closing only a portion of a filled position.
• Breakeven: A planned exit level near entry; net cash may still differ.
• Netting: An account method combining exposure by symbol.

Try it yourself

Complete ten demo amendments: several permitted stop and target changes, at least one partial close, one intentionally rejected modification, and a replayed gap scenario. Save the requested levels, accepted server states, remaining volumes and price results. Show how a worse stop fill changes the original planned loss. Do not perform this drill on a funded account.

What you can now do

• Explain planned versus realised risk on a stopped trade.
• Confirm stop and target amendments from the server record.
• Reconcile closed and remaining volume after a partial exit.

Next lesson

SO02.5 · Emergency Orders and Recovery. You will practise dealing with wrong orders, disconnections and missing protection.