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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. #1521
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    Understanding how to use the stop loss and setting it the right way is the best thing we could start doing for ourselves over time because it makes it hard for the market prices to come and hit off the trades anyhow, but it would always keep our trades safe and make sure that we never lost everything in our trading accounts over time. Stop loss when it is set under a support on a buying trade then it gives us more chances of coming out of the trade successfully and when set above the resistance then it gives us more chances of coming out successful too.

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  3. #1522
    Trader Senorita's Avatar
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    Stop loss is what we use to protect our capital in this market and if we have the intention to make it here, we must look on the chance to earn from forex. Stop loss is the best way to protect our investment and its important we always have a plan to manage this loss so we can have the chance to make it in this business. A good trader must have a better protection and that's where stop loss comes in place to see we minimize risk.

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  4. #1523
    Trader Toyen's Avatar
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    Generally, the use of stop loss and take profits is not what traders should overlook, traders have to use the two, that is what will not let the trader to trade anyhow. When traders could be using the stop loss and take profit, they will get to trade the market with the proper money and risk management, and they will not lose easily the way the traders that do not use them will be losing their capital.

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  5. #1524
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    Quote Originally Posted by Toyen View Post
    Generally, the use of stop loss and take profits is not what traders should overlook, traders have to use the two, that is what will not let the trader to trade anyhow. When traders could be using the stop loss and take profit, they will get to trade the market with the proper money and risk management, and they will not lose easily the way the traders that do not use them will be losing their capital.
    Stoploss is very important point which we much take it serious in our trade all the trade will face losses and failure if we do not use our stoploss in proper way so we all have to take it serious use a good risk management in all of our trade if we want to make to make good strategies these are possible through proper management skill .

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  6. #1525
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    Stop loss is very important to secure our account from unexpected losses. Traders usually use leverage that it is very good when we are earning money but leverage is very bad when market goes against us as losses increase very quickly and it is the main reason why traders should place stop losses. Of course, they should know where to place stops.

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  7. #1526
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    The use of stop loss is very important in this market,but then it is not just enough to use stop loss we must also learn how to place the stop correctly,if you are a scalper your stop loss will be of necessity small,compare to a long term trader who will need a large stop loss to accommodate draw downs.

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  8. #1527
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    Quote Originally Posted by Krosneles View Post
    Stop loss is very important to secure our account from unexpected losses. Traders usually use leverage that it is very good when we are earning money but leverage is very bad when market goes against us as losses increase very quickly and it is the main reason why traders should place stop losses. Of course, they should know where to place stops.
    The use of stop loss will get our trading account protected, that is the reason we must be sure that we always use the stop loss, the traders that are not using the stop loss can tell their stories of defeats in the market, they will always be hitting the margin all, this is not the good way to go about our trading. To go about our trading properly, the stop loss and even the take profit must be used.

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  9. #1528
    Trader Azis Muslim's Avatar
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    Quote Originally Posted by ajagbeolegba View Post
    The use of stop loss will get our trading account protected, that is the reason we must be sure that we always use the stop loss, the traders that are not using the stop loss can tell their stories of defeats in the market, they will always be hitting the margin all, this is not the good way to go about our trading. To go about our trading properly, the stop loss and even the take profit must be used.
    Stop loss has been protecting many trader's account life for all this time and it is our only best method to secure our trades from losing too much money from market. Indeed we still lose but we will not lose everything. Beginners will pass through stages of trading where they will find out how they can place their stop loss properly after series of misplacement from time to time. There is no other way or shortcut to understand this method because everyone must do this by themselves in order to get their own suitable methods. Following other's tips could help a bit but it will not prove us the best we actually need based on our mindset and risk level.

    Remember that everyone has different risk level and risk acceptance, that is why we place our stop loss in different amount and levels in market. Closing our trades in losses is an act of responsibility to secure our account and prepare ourself for the recovery with next trades. Make this as a habit so we can securely trade without worrying to lose a lot from market because we can recover them soon with better analysis. Always learn from our mistakes and try not to repeat them again.

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  10. #1529
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    in Forex trading stop loss and take profit points are very important things which we should must use because without these we can loos so much money. whenever you open an order always set the stop loss because with this stop loss you can save your account by washed up and take profit point will give you profit if you are not online then it will close your order on specific profit.

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  11. #1530
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    Quote Originally Posted by letsdo View Post
    in Forex trading stop loss and take profit points are very important things which we should must use because without these we can loos so much money. whenever you open an order always set the stop loss because with this stop loss you can save your account by washed up and take profit point will give you profit if you are not online then it will close your order on specific profit.
    I agree with you and i personally much like to use these in all the planned trade , without of these plan our trade ideas does not executed in right direction so we must have to make a good choice for risk management collectively help trader to achieve success and our trade plan will going to be successful .

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