How to place the Stop Loss correctly
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Thread: How to place the Stop Loss correctly

  1. #1
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    How to place the Stop Loss correctly

    Many traders complain of the fact that the Stop Loss placing is not profitable, cause it is carried away very often, and due to this issue it is better to bide a wee, and then get a profit if one is fortunate. But others argue that a Stop Loss should be put, or in one terrible moment, the market will clear your trading account. But even if you put the Stop Loss, it also will not save your deposit from death. After all, a large number of Stop Loss executed can also lead to deposit nullification.
    Some traders might argue that the deposit can be protected by the Locks, locking the losses in the flat between the two differently directed orders. But the locks have their own problems and nuances. But this topic is not about locks, but for those who are going to place the Stop Loss, but does not know how to do it correctly.

    Most of traders place the Stop Loss off the mark, supposedly 50 points is enough to be saved from the market. But in case the market took out Stop order placed, the trader decides it’s broker’s fault and malicious mischief. In fact, the broker does not hunt for Stop Losses. But the market likes to do it. That’s why very short Stop orders can be broken by hands down.

    Types of Stop Loss order:

    Time stop, or stop by times.
    We should enter to the market and waiting for a price runup or price level broken. In case the script is not realized for an hour, we close position at the market price, it does not matter will it be profitable or not. For example, we trade on the daily chart, we should close position if the signal is not realized within the day.

    The system Stop Loss.
    We have a TS, a signal and profit is expected in case we place a long position. But if the price turned and came down the X points, reaching the Nth level, the script was not realized. The script embedding directly depends on the market volatility. If the market is very volatile, the Stop Loss should be placed as far as possible. In case the script is implemented, we’ll get more profit. But in case of low volatility the Stop Loss can be small.

    MM Stop Loss.
    This type of Stop Loss is calculated by money management on the basis of including the risk percentage of the deposit. For example, the risk of each transaction corresponds 1% of the capital, with a deposit of 10*000 US dollars, 1% equals to 100 US dollars 0.1 In case the transaction includes 0.1 lot from the standard then the Stop Loss will be equal to 100 points.

    The Stop Loss is one of the components of the trading system, which does not work without all the TS complex. If a trader does have a profitable Trading System, the correct Stop Loss placing will not help him to earn, but just stave off deposit loss.
    These types of Stop Loss can be combined, using a bundle, everything depends on the trading system.

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    Stop loss is depends on the method of analysis, which we do, and I better put a stop loss just 20 points from the nearest support or resistance

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    every trader must put stop loss such as pit take profit point but hiw much points he put for the taje profit and how much point put for stop loss i find a lot of experts say when we put stop loss we need put take profit but in double to earn high profits and low loss

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    Quote Originally Posted by amrmorasamir View Post
    Stop loss is depends on the method of analysis, which we do, and I better put a stop loss just 20 points from the nearest support or resistance
    Every stop loss will depend on your trading style and move you want to capture. For a swing trader 20 pips stop is small enough, for daytrader it can be even too wide.

    Stop-loss must be reasonable. Once you've placed it you know that you will exit if your position doesn't work. For momentum trading you know it pretty quickly, for other styles you might need to hold trade a bit and to survive the pullback without being wiped out.

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    i prefer to put stop loss above the last resistance level and below the last support level on the higher time frames to avoid hitting of it and so if the price hits this stop loss level it will continue in the reversal direction in most cases and may result in reversal of the trend so this protect my account from big loss that may happen at any time

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    According to me its depend upon the support and resistance part of the market because its very hard to calculate otherwise on the other hand if you are doing trade in news period that will be good to make trade before 4,5 minute 20 pips up from the current price for by and 20 pips down from the current price for sell and can set 10 to 15 pips stop loss in both

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    In my opinion stop loss must be 50pips for small lots but 10 to 20pips for big lots it all depends upon your account capital i always prefer big stop loss and many times i avoid from loss.We should keep patience and give some time our open trades.

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    I believe best place to set an SL is to se market in H4 or D1 timeframe and set your SL beyond any support or resistance by 10 pips at least. Price usually hits any strong Support or Resistance and then bounces back, this way you can feel a bit more secure and when it breaks any of such levels it moves with high volatility and can cause big losses. Since you have set your SL near to support or resistance you need not to worry much.

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    If you want to become a good trader you should must be need stop loss system. Many of the analysis can be go your against so you must be need to use stop loss system for your best of luck .

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    As a discipline trader i always use stop loss option when i am enter a trade. it's help me to minimize my loss. i always set my stop loss point near the recent support and resistance level. i never set my stop loss by using my money management strategy cause i believe in trade management than money management.

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