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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. #21
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    each and every speculator must set halt reduction including hole acquire revenue stage nevertheless hiw very much things they set for the taje revenue as well as the amount stage set for halt reduction when i locate lots of experts claim when we set halt reduction we start to use set acquire revenue playing with dual to help earn high income as well as minimal reduction

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  3. #22
    Trader rinaji's Avatar
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    Quote Originally Posted by taharoyal52 View Post
    The 3 types of stop losses which you have mentioned, RoboForex Trader, are exactly the same which i do. Whenever i see good entry in my system, then i use system stop loss.
    Whenever i am deeply concerned with the management of money, i use MM stop loss and the last one which i use is when i dont have enough time to track the position :)
    You are good, not many traders who can do that, I just put a stop loss on the areas of support and resistance, regardless of the distance pips from the actual price. Is this way does not belong to the type of stop loss?

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  4. #23
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    Quote Originally Posted by shihab View Post
    A lots of trader make the mistake of using number of pips they will risk or gain, as a measure to there determine there take profit and stop loss point. This however is wrong as you would always fall into trap of placing your stop wrongly and at the end of the day you see price move your predicted direction and your trade permanently stopped stopped out.
    I really agree with you there are a lot of traders are doing many mistakes when you put a stop loss in the right place and this leads to great loss at times, and I think that stop loss depends on the type of analysis that we are relying upon the best place to put the stop loss is at support and resistance because it is considered strong points and the price of apostasy much

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  5. #24
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    Quote Originally Posted by mnmkforex View Post
    I found i lost money because too tight setting for stop loss. later i don't use too much stop loss. i close my position manually mainly. but i use it when there is big movement coming
    Setting too tight SL also not really good for trading, because market characteristics is always volatile up & down.... if trend is bearish and we sell a pair, price usually going up first and then finally going down.
    in this case, too tight SL will make price hit SL first before finally going down.

    Quote Originally Posted by amrmorasamir View Post
    I really agree with you there are a lot of traders are doing many mistakes when you put a stop loss in the right place and this leads to great loss at times, and I think that stop loss depends on the type of analysis that we are relying upon the best place to put the stop loss is at support and resistance because it is considered strong points and the price of apostasy much
    I agree that setting SL is depend on our trading technique.
    Trader with swing technique have different SL method compare than trader with scalping technique or intraday.

    For me, I use SL 50 pip.
    If most of my orders hit SL, then I stop trade live account and back to demo. It mean theres nothing wrong with SL 50 pips, but the mistake is on me...Possibly caused by poor decision enter market.
    But lucky, nowdays market rarely hit my 50 pip SL.

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  6. #25
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    The crucial factor is the risk management combined with favorable probalidades. Most traders become more profitable if they gave time and space enough to float their positions. But this alone is not enough if it lacks a method to do it consistently. It seems that the path to success would be shortened if followed with better risk management combined with the best entries and exits trades. We tend to be impatient, and this can make a big difference in the results. Mastering aspects such as psychological factor, can be as important as the mastery of technical skills and feeling the market.

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  7. #26
    Registered user SaeenKP's Avatar
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    Stop loss depends on your trading strategy and also it depends on your investment/account margin. If we are risking more and we think we win our trades then we can increase our stop loss but i think stop loss would be more then take profit and once we get our trade in profit then we can reduce stop loss level so we don't get serious problems!

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  8. #27
    Registered user Imtiazhasan's Avatar
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    Thank you very much for this thread. Would be helpful for the new traders indeed. Most of the new traders hit stop loss only because they do not know where to put the stop loss and where to put the take profit. I myself also used to make some silly mistake placing the stop loss. Now most of my analysis are correct.

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  9. #28
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    i see the volumes on how the market is behaving , and usually i also check the whole numbers and round figures like 00, 50 etc , because these are very much supportive or resistive regions so i place my stop loss there.

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  10. #29
    Trader debian's Avatar
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    Quote Originally Posted by pak forex View Post
    i see the volumes on how the market is behaving , and usually i also check the whole numbers and round figures like 00, 50 etc , because these are very much supportive or resistive regions so i place my stop loss there.
    No doubt that we need to apply stop loss in every our transaction because i think stop loss is very helpful tools to minimize our loss following our trading so we can safely our account for getting greater loss

    To place Stop loss for me its good in near around support and resistant, because in that area the price will bounce or break, so that support and resistant is vital point to determine about trend and the movement of airs

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  11. #30
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    For me, I use stop loss depend on trading strategy that I use. Fibo with Support and Resistance. For example, I make transaction (Open Position) at 61.8 level, then the price moves against with my position. In this case, I will set stop loss near with Support or Resitance line. The reason is, if the Support or Resistance line break, the price will continue.

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