Discover how to place your stop loss and take profit correctly
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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. #2
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    I think each and every trading strategy comes with the ways and means the trader can make use of the stoploss when trading. That is what I have learned, but the one I use in my trading strategy is the candlestick type, with that been said, I get to be able to control my risk and then take on good trades At the end of the day, we need to master the our strategy first before rightly use of stoploss.

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    Trader Sixteen's Avatar
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    Stop loss is one of the best way to protect our trading capital and I think the best way to place stop loss is after analysing the amount you wish to risk in a trade. The risk amount you decide to take coupled with the right lot size will help you determine the perfect stop loss that will help you follow your trading rules. So it's not about placing them at the support or resistance that matters most but on the value of risk you are willing to take.

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  4. #4
    Trader juniorpeters's Avatar
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    setting stop-loss and take profit is not difficult when your trading candle stick pattern or price action. in my trading i make use of support and resistance to determine my stop-loss and take profit and that depends on the time frame in which i took the trade. if i enter a trade on the lower time frame i target the strong zone for take profit and make use of the signal i got for entry as my stop level but on a higher time frame i use the nearest zone for my stop level.

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  5. #5
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    good article about placing stop loss and take profits in our trades. this is really a big problem when we are not doing a setup of our trade to put sl and tp some traders are doing trading without any stop loss and take profit.they are not made profits in the market for long term.to place a stop loss and take profit we have need to check support and resistance levels. these levels playing a big role to do trade with proper setup.

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  6. #6
    Trader Lyon's Avatar
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    Quote Originally Posted by juniorpeters View Post
    setting stop-loss and take profit is not difficult when your trading candle stick pattern or price action. in my trading i make use of support and resistance to determine my stop-loss and take profit and that depends on the time frame in which i took the trade. if i enter a trade on the lower time frame i target the strong zone for take profit and make use of the signal i got for entry as my stop level but on a higher time frame i use the nearest zone for my stop level.
    I agree with you on this, it is not hard when the traders knows how to make use of candle stick when trading, but when the trader is not making use of candle stick when trading it become hard for the trader. But the lesson here is however good for the trader that really wants to become profitable in the market. Our learning is all we need to be able to have the right approach in taking good trades.

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  7. #7
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    yes, dear placing stop is really important if you want to do trade for long-term.a professional trader always put stop loss before open his position and this is the rule of forex market to become successful. placing stop is done when you are a trade with discipline and a proper strategy. we have to need to learn a proper strategy to put stop loss correctly.
    Quote Originally Posted by Sixteen View Post
    Stop loss is one of the best way to protect our trading capital and I think the best way to place stop loss is after analysing the amount you wish to risk in a trade. The risk amount you decide to take coupled with the right lot size will help you determine the perfect stop loss that will help you follow your trading rules. So it's not about placing them at the support or resistance that matters most but on the value of risk you are willing to take.

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  8. #8
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    If loss is well managed we will always understand how to build a great trading that we need. Stop loss is important once it comes to forex and its one of such ways to protect our capital in a more profitable dimension. Managing risk should be our main concern and so using stop loss will a go a long way to help our trade and would give us adequate measures to see we can succeed and have a proper profitable kind of trade which is important in forex.

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  9. #9
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    Quote Originally Posted by Tonycee View Post
    If loss is well managed we will always understand how to build a great trading that we need. Stop loss is important once it comes to forex and its one of such ways to protect our capital in a more profitable dimension. Managing risk should be our main concern and so using stop loss will a go a long way to help our trade and would give us adequate measures to see we can succeed and have a proper profitable kind of trade which is important in forex.
    Generally, if traders can manage their trades then it will lead them to being profitable. Experience is the best teacher and the traders that has been able too understand the market gets to make good amount of money of money. This is a good suggestion on how to make use of stoploss and then have the account protected.

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  10. #10
    Trader Senorita's Avatar
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    Let's know that stop loss will always prove productive for us and know how we could work out on this process. Good trading requires adequate management and with stop loss we can as well help ourselves to build a great trading that will practically helps us achieve profitable trading. With loss management there is enough to gain and we can as well find it necessary to achieve goals of profits which is why we are here.

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