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

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    Registered user 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. #1361
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    This is one of my biggest challenges i face becoming a trader in my my early experience i notice that the trade i place price will always take me out before going to my predicted direction this happen because i wrong place my stop loss not knowing that SL should be place below or above the supporting zone that gave the signal for the trade be it down or for up trend because will always go and retrrace before continuing the trend.

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  3. #1362
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    For you to discover how to make good use of the stoploss when trading,you should first be the sort of trader who owns a trading strategy, when you have a trading strategy, then it could be more easier for you to know the rules to your trading strategy, it will be more easier for you to know the things you should do and then how to then protect your trading account.

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    Registered user Sixteen's Avatar
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    Quote Originally Posted by Osas Lugard View Post
    i notice that the trade i place price will always take me out before going to my predicted direction this happen because i wrong place my stop loss not knowing that SL should be place below or above the supporting zone that gave the signal
    This is why it's necessary for traders to learn because if you trade blindly in forex, buying and selling of any pair will still give you loss. Just imagine placing stop loss before support level or before a resistance level, it means the market will easily eat you out always and you will always trade frustrated thinking someone is monitoring your trade and making your stop loss hit. This is why experience is good because if we learn and develop experience, we get to know where to apply our stop loss properly.

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  5. #1364
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    It's too difficult to think that one can easily make profits from trading. Stop loss tends to be very important in forex because with a proper protection of our account, the possibility of still trading is always there. Learning to manage loss will be a nice way to survive and with our stop loss in place it will ensure that we take the risk we can sure get to manage. I do what it takes to manage loss and for me it's been the most important thing in forex that would grant me safety.

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    The main thing in forex is not to lose much and protect the account from losses. It is the only way to earn in forex cutting losses quickly and letting profits to run. Stop loss is the best option in seeking the losses not to exceed the limits and money management to be good. Traders can lose money today but they will earn money tomorrow.

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  7. #1366
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    Your stop loss is very helpful and the best thing as a trader in this market is to understand how to manage your loss and build a profitable strategy that will give you a great chance to continue winning. Your risk management is something you must understand about in order to plan on the best way to manage loss an increase efficiency in trading. Stop loss will continue to be a means to protect our capital and its something we must be well ready to manage.

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  8. #1367
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    Quote Originally Posted by Sixteen View Post
    This is why it's necessary for traders to learn because if you trade blindly in forex, buying and selling of any pair will still give you loss. Just imagine placing stop loss before support level or before a resistance level, it means the market will easily eat you out always and you will always trade frustrated thinking someone is monitoring your trade and making your stop loss hit. This is why experience is good because if we learn and develop experience, we get to know where to apply our stop loss properly.
    It is called gambling and the traders who gamble are the ones who has been lazy not to do the right learning. We have a lot of things and tools to learn, the appropriate way of learning how to make use of the stoploss is that we start the use of the demo account with the mindset of learning and not the mindset of earning.

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    This is a good ideas for place stoploss on trade and it is very good and most helpful way for trader to build a good plan , we learn to make our trade perfect with knowledge and efforts we know that level on chart where price have support and resistance so these will help trader to achieve good results and all of these will be beneficial for successful trading .

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  10. #1369
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    Your stop loss should be 20 pips far from your entry and your take profit should be varied on three levels. Never try to take profit at once always divide the lots into three parts and take profit in three levels. Always open three divided lots at the same level and divide the target into three support and resistance levels.

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  11. #1370
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    One of the things I think each and every trade needs to know and learn is how to place his or her stop lose and take profit respectively. Stop lose is what tells your trade where to stop its execution whenever its going against you while take profit on the other hand is also what tells your trade the exact point or amount of money in profits you want to close that your trade with. So if you don't know how to make use of those tools, you might end up losing it all.

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