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Thread: Discover how to place your stop loss and take profit correctly

  1. #1
    Trader Toyen's Avatar
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    Discover how to place your stop loss and take profit correctly

    Introduction:
    One of the main challenges i face when i started trading forex market is the inability to place my stop loss and take profits correctly. All i knew was to trade forex with the best strategy, that is why many traders are still learning everyday because they want the best strategy, but they will not get it. Traders can only make the best from the little things they know by planning it well, and when we have the correct method of doing things, our trading experience will be an enjoyable one for us.

    As many traders might have known this stop loss and take profits strategy, they can therefore call it an exit point strategy, since they are the point at which trader closes their trading position, this is very important for us in planning our money and risk management also, that is why it is very important to every one of us.

    How to place a correct stop loss:
    There are two ways i know in doing this, we can use the support and resistance level to do it, and we can use the important height and low on the candlesticks chart.

    Candlesticks type:
    Take for example the picture of USDJPY below, when we consider to sell the market, our stop loss will be at the red lines which i drew on the chart, the one the trader will use depends on the term and duration of trading of the trader. It is like that because that point are the sharp peak points on the chart by that time.





    Support and resistance type:
    The support and resistance is simple, take trendline strategy on USDJPY as example on 4H chart. When you plot the trendline already, your stop loss will be at some few pips above trendline level in case the market breaks off the line against you. This example is for trendline resistance and you shall do the same with the opposite too.





    How to place a profit target correctly:
    This can also happen in two ways, we can use the candlesticks sharp peak point and bottom to do it, just like it is seen in this picture.





    We can also use the support and resistance levels of any breakout strategy to place it. Let us take pivot point for example, when we trade buy market, and R1 of pivot is broken, we can target R2 or R3 as our take profits.

    I hope this will help many traders. You can ask me any question you don't understand on this.

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  2. #1601
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    Price action is best trading strategy for us to enter and exit from a trade with good profit and use this strategy we also know about the stop loss and take profit points. We must place the stop loss above the high and below the lower price levels which are give us best trades to earn money from forex trading and make easy for traders to earn money without any risk.

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  3. #1602
    Trader Senorita's Avatar
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    Your stop loss is important in this market and must be applied if your intentions to become a great trader is genuine. Without stop loss our trade will be opened with high risk and this means that the capabilities of loosing huge will always be there. We must know how to manage loss and create a better impressive means of trading that would however see we can earn in this business. Stop loss is important and its sure the better way to likely protect this capital.

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  4. #1603
    Trader Rylai's Avatar
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    Quote Originally Posted by Senorita View Post
    Your stop loss is important in this market and must be applied if your intentions to become a great trader is genuine. Without stop loss our trade will be opened with high risk and this means that the capabilities of loosing huge will always be there. We must know how to manage loss and create a better impressive means of trading that would however see we can earn in this business. Stop loss is important and its sure the better way to likely protect this capital.
    Otherwise traders won't get anything from market eventually if they focus on making money without doing something about their methods of limiting the risk market could take from our account. stop loss and take profit should be placed well with our trading system and money management to make sure we're trading for profit and secure our account from losing unexpected trades that goes off beyond our analysis.

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  5. #1604
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    making use of the stop loss is always good because it helps to reduce the rate of the losses we might be facing on daily basis and it is possible not to lose everything in your trading account when you have learned and mastered the way through which stop loss are set over time. most times the novice fore trader can make use of the stop loss trading tools but they are not setting it at the right levels which means that they are going to end up losing that trade due to the fact that the forex market is going to hit them off even before making it to their profit taken levels.

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  6. #1605
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    Placing of stop loss correctly is very important just as placing stop loss itself,once you do not place your stop loss directly there is always the danger that you might end up losing in the market,a scalper can not place stop loss like a long term trader and vice versa,every strategy should come with where to place the stop.

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  7. #1606
    Trader Toyen's Avatar
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    Quote Originally Posted by Rylai View Post
    Otherwise traders won't get anything from market eventually if they focus on making money without doing something about their methods of limiting the risk market could take from our account. stop loss and take profit should be placed well with our trading system and money management to make sure we're trading for profit and secure our account from losing unexpected trades that goes off beyond our analysis.
    It is not good to forget the use of stop loss and get to believe that you will make it in the market, the market will disgrace any trader trying to work against it in this manner. I believe that the market has its own way of trading, when traders do not respect this way but introduced his own bad ways of trading, the traders will get to lose everything he has.

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  8. #1607
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    .Trading the market with trend is very important. One of the best way to trade is to simply know how to place your stop loss correctly as a trader because it's same as trading perfectly.place it wrongly will always lead to a lost cause .The right way in my opinion is to place it after the supporting zone of entry at least a few pips above it for a selling order or below it for a buying order.

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  9. #1608
    Trader Sixteen's Avatar
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    Stop loss is the very best way to handle risk and its what we should plan to apply always in forex. We must know how to minimize loss and make use of the right stop loss in our trade. We must know how to apply stop loss and be ready to put in enough time to build a profitable system we can follow. Stop loss is important and we can use this to always save our capital from the prospect of huge loss in forex.

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  10. #1609
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    Having the right protection on this market is helpful and if we can understand how to deal with loss, it is likely to be for our own good. Stop loss is a great way to manage risk and we should understand the impact of proper management when it comes to this trade. Loss must be minimized and we should try to understand our risk here and do what it's obtainable to earn here. Knowing how to manage loss will be for our own good and this is likely to help us develop to maintain a strong trade.

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  11. #1610
    Trader Goldenstein's Avatar
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    Quote Originally Posted by Sixteen View Post
    Stop loss is the very best way to handle risk and its what we should plan to apply always in forex. We must know how to minimize loss and make use of the right stop loss in our trade. We must know how to apply stop loss and be ready to put in enough time to build a profitable system we can follow. Stop loss is important and we can use this to always save our capital from the prospect of huge loss in forex.
    closing our trades manually during our live observation is also good thing to do because it is a faster method than stop loss. we may do this with our trading after we realize that market is no longer supporting our analysis and it is going to hit our stop loss anytime soon. to reduce our loss and start participating real movement, we can take this quick action and make new analysis to trade with better movements to follow market.

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