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Thread: How to place the Stop Loss correctly

  1. #1
    Super Moderator RoboForex Trader's Avatar
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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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  2. #3901
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    According to the manner y which we can analyses our markets i think that the stop loss can be located well . so in the times we trade in random the stop loss also will be located random . and this is very dangerous . also the fact of the effective strategy can be help to have good role to appoint the place of the two orders the stop loss and the take profit

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    Registered user mexima's Avatar
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    well my method to put sl is i always analysis the major support and Resistance on the h4 to d1 chart some time when market is not clear i analysis on weekly as well then i always put sl 10 pip pip below or up on the support and resistance level the major reason is that market mostly reverse it from that levels.

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    Registered user cutiekc's Avatar
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    The stoploss is been placed in accordance to what the trader has learned , the use of the stoploss has to be learned using the demo account when the trader is learning on how to trade the market. Furthermore, there is no other best way of learning and trying to master the market aside from not learning using the demo account. Stoploss though will not be placed perfectly, but with the learning and consistent practice, the trader can perform good.

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    Registered user Toyen's Avatar
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    Quote Originally Posted by mexima View Post
    well my method to put sl is i always analysis the major support and Resistance on the h4 to d1 chart some time when market is not clear i analysis on weekly as well then i always put sl 10 pip pip below or up on the support and resistance level the major reason is that market mostly reverse it from that levels.
    I am glad that you came plainly with the way you are placing your stop loss. What you have explained here is not bad at all, and i believe that the traders with the right support and resistance system will always get to trade the market with strong purpose and success will be achieved. Traders should likewise not use the lower time frame for this, that will be a mistakes because the stop loss will not be strong and reliable in that case.

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  6. #3905
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    We have great means to earn here and we should know how to manage loss properly. Placing of stop loss can help us and it can help us understand how we can manage this loss. Stop loss remains a good way to manage our risk, therefore we should do our best to handle this loss and create a better chance towards which we can earn from this business. Success is the best thing we should work for and we should however know how we can plan on this trade to see we can successfully make profits at the right time.

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  7. #3906
    Registered user mexima's Avatar
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    Quote Originally Posted by Abu George View Post
    According to the manner y which we can analyses our markets i think that the stop loss can be located well . so in the times we trade in random the stop loss also will be located random . and this is very dangerous . also the fact of the effective strategy can be help to have good role to appoint the place of the two orders the stop loss and the take profit
    putting sl and tp randomly means your trade will be 100% in danger because you don't know the exit point you mus analysis the market . the point where you should think market will gonna give you loss . that point will be your sl if you think market will not give your loss then try to move your sl at break even level or some amount on profit pips.

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  8. #3907
    Registered user cutiekc's Avatar
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    Quote Originally Posted by mexima View Post
    putting sl and tp randomly means your trade will be 100% in danger because you don't know the exit point you mus analysis the market . the point where you should think market will gonna give you loss . that point will be your sl if you think market will not give your loss then try to move your sl at break even level or some amount on profit pips.
    The Tp and take profits has to be in line with our trading strategy, that is the more reason why we have to use the demo account to learn and then have a good idea about how to manage and make use of our trading strategy. We all have our strategy rules so following it shouldn't be a problem, also as time goes by, we then will be able to know the right thing to be done, whereas knowing the best stoploss that will suit our account.

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  9. #3908
    Registered user sniper007's Avatar
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    You get to place the stoploss correctly, when you have good learning and then a better experience. Experience is the key to being successful, if we don't have the experience then we should know that we will find it so much hard to become successful. Stoploss differs from trader to trader, hence the reason why we have to use the demo account to learn first and now what is the one to be used.

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    Quote Originally Posted by sniper007 View Post
    You get to place the stoploss correctly, when you have good learning and then a better experience. Experience is the key to being successful, if we don't have the experience then we should know that we will find it so much hard to become successful. Stoploss differs from trader to trader, hence the reason why we have to use the demo account to learn first and now what is the one to be used.
    We have to practice implementing our strategy and then we come to know how we can use the tp and SL according to it. The thing is there cannot be a hard and thumb rule for using the stop loss, it has to be determined based on our strategy and trading style. Further we also have to keep an eye on the risk reward ratio so that we manage to achieve consistency in our performance.

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  11. #3910
    Registered user ola4real's Avatar
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    Quote Originally Posted by mexima View Post
    putting sl and tp randomly means your trade will be 100% in danger because you don't know the exit point you mus analysis the market . the point where you should think market will gonna give you loss . that point will be your sl if you think market will not give your loss then try to move your sl at break even level or some amount on profit pips.
    It is not what is wise for forex traders to be trading with random stop loss and take profits. Forex traders must have their specific approach to place the stop loss and take profits, that is what will correctly equate the risk management in whom the forex trader is trading. I think that with the use of support and resistance levels, this issue will be correctly resolved in the favor of the forex trader.

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