How to place the Stop Loss correctly - Page 393
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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. #3921
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    Quote Originally Posted by naeem555 View Post
    but the issue is how we can understand its good way or not, some time we people use demo account and learn about management also but there is much difference in real and demo, so make sure you have some good capital on real to understand its good or not, just demo is not enough here, if we are doing demo then make sure you use smaller capital on demo also for understanding real management
    It is good if we learn management while practicing using a demo account, we should try and protect ourr demo balance. That is right it is not possible to know things accurately, that is why it is must that we manage the things properly and protect our money from big losses with stop loss. Using the stop loss gives a good margin to support our trades and also it protects us from margin calls.

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  3. #3922
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    There are no fixed ways of placing the stoploss, which means that I could have a different way of placing it and then the other trader over there could also have a different way of placing their stoploss. What this means is that since we all have different trading strategies, I think we will also get to have different ways of placing the stoploss, but what matters is that the stoploss should really be functional in our various ways of using it.

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  4. #3923
    Trader Toyen's Avatar
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    Quote Originally Posted by Striker$ View Post
    There are no fixed ways of placing the stoploss, which means that I could have a different way of placing it and then the other trader over there could also have a different way of placing their stoploss. What this means is that since we all have different trading strategies, I think we will also get to have different ways of placing the stoploss, but what matters is that the stoploss should really be functional in our various ways of using it.
    You are right, there is no fixed way to place the stop loss, the stop loss is likewise important every time we are trading the market. All the time we are trading the market, we are actually taking risk, we may lose all our money when we do not plan for the right use of the stop loss. I have three ways to place the stop loss and all of them are working well for me, specifically the one that is using the support and resistance level.

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