Question About Amount of Stop Loss
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  1. #1
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    Question About Amount of Stop Loss

    Hello,

    Anybody can point me to the right direction on how to set my stop loss appropriately?

    Quite many of the time when i place a larger stop loss, the price hit my large stop loss and end up heavy losses.

    But when i place a small stop loss, the price seem like tend to hitting the stop loss line very frequently and i have to repeatedly place multiple orders with the same small amount of stop loss and toward the same trend for a currency pair. With small stop loss, even i catch the right trend for a certain pair and earn significant amount of pips but overall i still having negative profit because i have lost quite many pips from many small stop loss trades during the starting of the trend.

    Can you give me some guideline on how to set a appropriate stop loss?

    Thanks in advance.

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    Well, i have notice that you can not say that your stop loss is fixed, it is not fixed. Stop loss should be determined by what you have seen on the trading chart. It may be more or less if you study the trading strategy very well. But be careful not to be using large stop loss all the time that you trade, lower stops helps better.

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    I am now practicing SL and TL in my trade to learn it well. I have experienced that there is no fixed ratio to use it, it depends on trading chart. Generally I use some other indicator like Moving Average, Support & Resistance and 50 EMA for defining the TP and SL. Specially I get good result to put TP and SL in analyzing Support and Resistance. Sometimes I put TP 3 pips while support and resistance level signals me to use SL only 6 pips.

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    Quote Originally Posted by cozard007 View Post
    Well, i have notice that you can not say that your stop loss is fixed, it is not fixed. Stop loss should be determined by what you have seen on the trading chart. It may be more or less if you study the trading strategy very well. But be careful not to be using large stop loss all the time that you trade, lower stops helps better.
    What we need to see in the chart in order to use large stop loss? Or in other words, what time we need to use large stop loss and what time stop loss need to be small?

    Quote Originally Posted by Jamuna View Post
    I am now practicing SL and TL in my trade to learn it well. I have experienced that there is no fixed ratio to use it, it depends on trading chart. Generally I use some other indicator like Moving Average, Support & Resistance and 50 EMA for defining the TP and SL. Specially I get good result to put TP and SL in analyzing Support and Resistance. Sometimes I put TP 3 pips while support and resistance level signals me to use SL only 6 pips.
    If there are several support and resistance levels i found in the chart, which one i should choose to place my stop loss?

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    the two things tat will determine the amount of stop loss a trader will apply to a trade are the trading technique and the time frame that the trader is using in doing the market analysis before entering into the trade , because when you are using smaller time frame the stop loss seems to be smaller and when you are using the bigger time frame the stop loss seems to be bigger.

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    Do you recommend do not using any stop loss?
    Since the purpose of chart analysis is to find out which direction the price will move, if we have done enough technical analysis, the price should go the direction that indicated by the analysis and do not need a stop loss.

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  7. #7
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    There can't be a proper stop loss entry if you don't have a well established trading strategy.while building your strategy by observation,you wild learn to input a proper and managable stop loss level,so if I was to tell you that this is the right way to place a stop loss ill be lieing to you because we don't have similar trading strategy,so its your sole duty to do a proper study to be able to place a manageable stop loss level,depending on market condition.

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    My Friend it is totally depends on the trader's strategy and we need to understand that Stop Loss is very essential part of the every trade. A trader must know the support and resistance area for setting the stop loss area. And I hope everyone can use this strategy to set up the Stop Loss and Take profit area.

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    Quote Originally Posted by masonlee View Post
    Do you recommend do not using any stop loss?
    Since the purpose of chart analysis is to find out which direction the price will move, if we have done enough technical analysis, the price should go the direction that indicated by the analysis and do not need a stop loss.
    no i do not agree with your point that traders should not use stoploss. I certainly recommend that traders should always try to make use of stoploss in all their trades because there is no way a trader can be 100% sure to get accurate signal from analysis all the time.

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  10. #10
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    Stop loss is a good way to limit money the trader will lose at a point in time. It is very good to use this. The stop loss i know will not be too big or tow small, this is where traders are getting mistakes of the use of the stop loss. I have my fixed stop loss, it is only 35 pips stop loss i choose all the time i trade forex.

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