XM (XMTrading): Stop Loss and Take Profit Terms Explained, How to Set Them, and a Clear Comparison with the Latest Version (Overseas Forex Broker XM)

To trade on XM you need to be sensitive to stop loss and take profit. This is because if you don’t know where to cut losses and where to take profits, you will end up with endless positions. There is no such thing as a 100% win rate in Forex orders. If you do not manage risk properly, you will be asked to leave the world of Forex.

XMtrading

Operating company	Tradexfin Limited Fintrade Limited
Head office location	Unit E, F28, Eden Plaza, Eden Island, Republic of Seychelles
Founding year	2009
Financial License	（FSA）SD010：Tradexfin Mauritius Financial Services Commission (FSC：)：Fintrade Limited Cyprus Securities and Exchange Commission (CySEC)：Trading Point of Financial Instruments Ltd
Language support	English、日本語、Malay、Thai
Platform	MetaTrader 4 (MT4)／MetaTrader 5 (MT5)
Service Countries	Over 190 countries
Number of users	Over 1 million accounts
Max Leverage	1000x
Eligible products	Forex、Metal、Stocks、Equity Indices / Index CFD、Energy CFD、Commodities、Cryptocurrency

What is an XM Stop Loss?

An XM Stop Loss is an order method that automatically closes a position when losses reach a certain amount or level.

Stop Loss Basics

You specify a price in advance at which you want to cut your losses.

When that price is reached, the position is automatically closed.

A risk management measure to prevent large losses.

Example:

Buy USD/JPY at 150.00

Set a stop loss at 149.50
→ Automatically close (limit your losses) when the price falls to 149.50.

Features of XM Stop Losses

① Easily set in MT4/MT5

Set when placing a new order

Can be changed even after opening a position

② Different from a forced stop loss

Stop Loss: A stop loss you set yourself

Loss Stop: XM will automatically liquidate your position if your margin maintenance rate falls below a certain level

👉 By setting a stop loss,
you can control your losses before a stop loss occurs.

Benefits of Setting a Stop Loss

Determine your loss amount in advance

Prevent emotional trading

Safe even during sudden fluctuations or when you can’t view charts

Points to Note (Unique to XM)

Slippage may occur during sudden market fluctuations
→ Your order may be executed at a price slightly less favorable than the specified price

Unexpected settlements may occur during indicator announcements or the opening of a trading window at the start of a new week

How to Set a Stop Loss in XM

This section explains how to set a stop loss (SL) in XM (MT4/MT5), step by step, so even beginners can easily understand.

Method 1: Setting a stop loss when placing a new order (basic).

This is the most recommended method.

Steps (for both MT4 and MT5)

Select a currency pair from quotes

Click “New Order”

Enter the following on the order screen:

Stop Loss: The price at which you want to cut your losses

Take Profit: The price at which you want to lock in your profits (optional)

Click “Market Sell/Market Buy”

👉 Safe because a SL is entered immediately upon opening the position.

Method 2: Setting or Changing a Stop Loss After Opening a Position

Use this when you want to “set a SL later” or “adjust the SL.”

Steps

Open the “Trading” tab in the terminal (bottom).

Right-click the position you want to set.

Select “Modify or Delete Order.”

Enter your stop loss price.

Click “Change.”

Method 3: Setting by dragging on the chart (easy).

For those who prefer visual adjustments.

Procedure

Check the position displayed on the chart

Drag the red dotted line (SL line) up or down

Remove it at the desired position

※ If the SL line is not displayed
→ Right-click the position → “Modify Order”

Important Rules for Setting Stop Losses (XM)

Minimum Setting Distance (Stop Level)

Cannot be placed within a certain number of pips from the current price

Varies depending on the currency pair and market conditions

📌 If an error occurs
→ Move the SL “a little further away” to resolve the issue.

Stop Loss Width Guidelines for Beginners

Short-Term (Scalping): 5-15 pips

Day Trading: 20-50 pips

Swing Trading: 50-150 pips

※ Adjustment based on lot size and margin is important

What is XM’s Take Profit?

XM’s Take Profit (TP) is an order that automatically closes and locks in profits when a predetermined price is reached. While this point typically depends on the timing and rate of price movements, it is determined using knowledge and experience.

The Basics of Take Profit

Specify a “take profit” price in advance.

Automatically closes when the market reaches that price.

Ensure profits without constantly monitoring the chart.

Example:

Buy USD/JPY at 150.00

Set take profit at 150.80
→ Automatically lock in profit when 150.80 is reached.

Features of XM’s Take Profit

① Easily set with MT4/MT5

Set when placing a new order

Can be added or changed even after opening a position

② Ideally, use it in conjunction with a Stop Loss (SL)

SL: Limits losses

TP: Locks in profits

👉 By setting these two together,
You can proactively manage risk and return.

Benefits of Setting a Take Profit

Less likely to miss out on profits

Prevents greed and indecision

Ensures profits even during sudden market fluctuations

Points to Note (XM Only)

Slippage may occur when indicators are announced.

During sudden rises and falls, the trade may be executed slightly later than the specified price.

Placing the TP too close to the target may result in a quick end in a rising market.

How to Set Take Profit on XM

We’ll explain three easy-to-understand methods for beginners to set take profit (TP) on XM (MT4/MT5). Look at limit orders and stop-loss orders. Set them in the same way as stop-loss orders. Overseas FX brokers allow you to set values ​​in detail for each fund. Be sure to tap the platform to calculate the conditions. Determine the range based on your own predictions and scenarios.

Method 1: Set when placing a new order (Basic/Recommended)

This is the safest and most basic method.

Procedure (for both MT4 and MT5)

Select a currency pair from the quotes

Click “New Order”

On the order screen

Take Profit: The price at which you want to lock in your profit

(Enter a stop-loss at the same time, if necessary)

Click “Market Sell/Market Buy”

👉 TP is entered immediately upon entry, so you can leave it alone.

Method 2: Set or change after opening a position

If you want to “set TP later” or “change your target.”

Steps

Open the “Trading” tab at the bottom of the screen

Right-click the target position

Select “Modify or Delete Order”

Enter your take profit price

Click “Modify”

Method 3: Drag on the chart to set (intuitive)

For those who want to adjust while monitoring the price.

Steps

Check the position displayed on the chart

Drag the blue dotted line (TP line) up or down

Release at the desired position

Reasons for Setting Inability (Common with XM)

① Minimum Setting Distance (Stop Level)

Error if too close to the current price

Varies depending on currency pair and time period

👉 Solution: Move TP slightly away

② Wrong Buy/Sell Direction

Buy → TP is “above the current price”

Sell → TP is “below the current price”

TP guideline for beginners

Trading Style	TP guideline
Scalping	5～15pips
Day Trading	20～60pips
swing	50～200pips

Comparison of Stop-Loss and Take-Profit between XM and Other Brokers

While the basic functions of stop-loss and take-profit in FX trading are offered by all brokers, differences emerge between XM and other brokers in areas such as “flexibility of settings,” “stop levels,” “guarantees,” and “execution characteristics.” The key points are summarized below.

✅ ① XM’s Stop-Loss/Take-Profit Features

🔹 Basic Functions

Stop-Loss (SL): An automatic closing order that limits losses.

Take-Profit (TP): An automatic closing order that secures profits.

Both can be set and changed at the time of order placement or after holding a position.

🔹 XM’s Strengths

Zero Stop Level

With XM, the “stop level” required for setting SL/TP is 0 pips, allowing you to freely set SL/TP even at positions extremely close to the current price.

→ For example, it can flexibly handle small orders in scalping and EAs (automated trading).

Flexible Operation on MT4/MT5

You can flexibly handle operations such as dragging and dropping on the platform, setting entry points, and adjusting positions when changing them.

However, slippage (execution at a price less favorable than the specified price) may occur during sudden market changes.

🔹 Points to Note (Disadvantages)

Guaranteed Stop Loss is not offered
→ While XM has standard SL/TP, it does not offer a guaranteed stop loss that will always close at the specified price during sudden market changes or gaps (common to many overseas FX brokers).

Market Maker (Dealing Desk) Model
→ XM is a market maker model, and because it processes orders internally, there are some reviews stating that in rare cases, when the spread widens, it may affect the SL.

✅ ② Comparison Points with Other FX Brokers

📌 1) Stop Level

Exness and several major ECN/STP brokers also use a stop level of 0, allowing for settings equivalent to or more flexible than XM.

Some brokers may only allow SL/TP to be set at a certain distance or more when manually configured, which can be a constraint depending on the strategy.

📌 2) Availability of Guaranteed Stop-Loss

Some brokers (e.g., easyMarkets) offer “guaranteed stop-losses” that ensure settlement at the specified price even in the event of slippage or gaps (usually with an additional fee).

→ Compared to standard SL/TP like XM, this is advantageous if you want to reliably limit losses, but it can be more expensive.

📌 3) Execution Reliability and Slippage

ECN and STP brokers (e.g., IC Markets, Pepperstone, etc.) offer execution closer to market liquidity and tend to have smaller average slippage.

→ Depending on the strategy, this may be considered to make SL/TP execution more likely to occur as planned (※however, this depends on market conditions).

※While XM’s market maker type generally has few problems under normal circumstances, there have been reports of spread widening during economic indicator releases.

📌 4) Platform Support

Many brokers support MT4/MT5, but there are differences in the usability of their interfaces and functions (e.g., one-click SL/TP changes, API integration, custom order types, etc.).

📌 Comparison of SL/TP between XM and other companies

比較項目	XM	他の一般的なブローカー
ストップレベル	0（柔軟）	0のところあり、pips必要なところあり
保証ストップ	×（提供なし）	○（有料で提供あり例あり）
約定性/スリッページ	正常時〇、指標時に拡大可能	ECN/STP系業者は滑りにくい傾向
ツール/機能	MT4/MT5標準機能充実	プラットフォームによって追加機能あり

🔍 Which should you use?

Short-term trading/EA usage/scalping: Stop level 0 is advantageous → XM, Exness, etc.

Want to reliably limit risk: Brokers offering guaranteed stop-loss (easyMarkets, etc.)

Prioritize execution accuracy: ECN/STP model brokers (e.g., IC Markets, Pepperstone)

*Basic SL/TP is available with any broker, but it’s important to choose one that aligns with your strategy (timeframe, acceptable cost, risk management criteria).

Frequently Asked Questions about Stop Loss and Take Profit

This section compiles common questions about stop loss (SL) and take profit (TP) in FX trading. These are topics that beginners to intermediate traders often find confusing.

What are Stop Loss and Take Profit?

Stop Loss (SL)
→ An automatic closing order to limit losses. The position is automatically closed when the set price is reached.

Take Profit (TP)
→ An automatic closing order to secure profits. Profits are automatically realized when the set price is reached.

Q1: When should I set SL/TP?

Ideally, set it at the time of entry.

It is possible to add or change it later, but sudden market fluctuations may prevent you from setting it at the desired price (because stop levels vary by broker).

Q2: Will SL/TP always be closed at that price?

Normally, it will be closed at a price as close as possible to the market price, but if the market changes suddenly, “slippage” may occur, and the position may be closed at a less favorable price than the specified price.

With brokers that offer “Guaranteed Stop Loss,” the position will always be closed at the specified price for a fee.

Q3: Can I set SL/TP at a price close to zero?

Some brokers, such as XM and Exness, have a stop level of 0, allowing you to set it very close to the current price.

Other brokers may require a minimum distance of a certain number of pips.

Q4: Can I change SL/TP later?

Yes, most brokers allow it.

In MT4/MT5, you can change it by dragging on the chart or by directly entering the price in the order panel.

Q5: Can I set multiple SL/TP?

Basically, one SL and one TP per position.

If you want to have multiple targets, you need to split the position and create separate orders.

Q6: Does setting SL/TP reduce trading flexibility?

When set appropriately, it only makes risk management easier; it doesn’t reduce strategic flexibility.

Conversely, not setting them can lead to significant loss risks.

Q7: How far apart should SL/TP be?

The basic principle is to adjust it according to market volatility (the range of price movement).
Examples: Short-term scalping → around 10-20 pips

Medium- to long-term trading → tens to hundreds of pips

Using technical indicators (support and resistance) and ATR (Average True Range) as a guide is rational.

Q8: What are the advantages of using SL/TP?

Losses can be automatically limited

You won’t miss profit-taking opportunities

You can trade without being influenced by emotions