How to place the Stop Loss correctly - Page 392
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Thread: How to place the Stop Loss correctly

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    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. #3911
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    First understand your risk and know where you should be able to apply stop loss in forex. Stop loss is a very good chance to manage our risk and knowing the right level to place them will ensure we are really doing what it takes to handle such loss. Without means to manage loss, we all know how tough it gets and its necessary we decide on making the right plans that would see that risk is managed.

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  3. #3912
    Registered user cutiekc's Avatar
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    Quote Originally Posted by Ulthred View Post
    First understand your risk and know where you should be able to apply stop loss in forex. Stop loss is a very good chance to manage our risk and knowing the right level to place them will ensure we are really doing what it takes to handle such loss. Without means to manage loss, we all know how tough it gets and its necessary we decide on making the right plans that would see that risk is managed.
    That is right, when the trader has been able to have comprehend the risk first, then other things will fall in place, the factor of not using stoploss correctly is because of the fact that the trader hasn't been able to have understand the risks or better still yet, there are some traders who don't comprehend the fact that risk is involved in the business and they ought to be calculative about it .

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  4. #3913
    Registered user Sascha's Avatar
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    Quote Originally Posted by cutiekc View Post
    That is right, when the trader has been able to have comprehend the risk first, then other things will fall in place, the factor of not using stoploss correctly is because of the fact that the trader hasn't been able to have understand the risks or better still yet, there are some traders who don't comprehend the fact that risk is involved in the business and they ought to be calculative about it .
    knowing the risk not just for market but for the traders themselves first. we're the one who responsible in controlling things, and once we can understand that market is risky then able to act accordingly to the situation, then we'll mostly can handle any situations when we're trading. stop loss is just one of many methods to help us limit our risk from market and i can assure it to beginners it's the best and easiest method for this trading.

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    Registered user mexima's Avatar
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    time stop loss is used to news time or when market will be violate how ever professionally the perfect sl is to put on top and the bottom of the support and resistance level how ever the difference can be more thn 10 pip because market usually move after hitting support and resistance level some time hit more then 10 pip so for security use 10 pip top or bottom level.

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  6. #3915
    Registered user Azis Muslim's Avatar
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    Quote Originally Posted by cutiekc View Post
    That is right, when the trader has been able to have comprehend the risk first, then other things will fall in place, the factor of not using stoploss correctly is because of the fact that the trader hasn't been able to have understand the risks or better still yet, there are some traders who don't comprehend the fact that risk is involved in the business and they ought to be calculative about it .
    Some of us has already understand the fact and importance of using stop loss for trading, it is just the method that sometimes not really appropriate to do and still giving us wrong trade. However, it is the purpose of using stop loss to prevent ourself from losing much from market since we can never stay accurate with our strategy, even if we are totally assured with everything we know. That what makes this trading become not so easy to do.

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  7. #3916
    Registered user cutiekc's Avatar
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    The use of stoploss is so much important, lets take it seriously. A good trader should often see the importance in using risk management in their trades, on the other hand, we all are trading differently, so we will probably have different approaches in trading and all that, so we should learn personally on how our trading strategy and stoploss should be used.

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    Registered user Toyen's Avatar
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    Quote Originally Posted by cutiekc View Post
    The use of stoploss is so much important, lets take it seriously. A good trader should often see the importance in using risk management in their trades, on the other hand, we all are trading differently, so we will probably have different approaches in trading and all that, so we should learn personally on how our trading strategy and stoploss should be used.
    It is so important to me to use stop loss, this is what i use and have the rest of mind as i am trading the market. The traders that are using the stop loss are the traders that will have much confidence in their trading, they would have known what they can lose in maximum, so there will not be any fear in the trade of that trader. Using the stop loss needs us to learn how to use it, without that, traders can still use it wrongly.

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  9. #3918
    Registered user Sixteen's Avatar
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    To do well try to manage your loss here because bad management have always been the huge cause of huge loss in forex. With stop loss placed at the right level we will see we don't go further to loose unnecessarily in forex. Stop loss is a good way to protect our capital and we should learn to place them accordingly in this business. We must always have a plan to deal with loss and we should always realize the best management is what is good to follow.

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  10. #3919
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    First of all, the ways of using stoploss correctly is by making sure that you have taken the learning in accordance with the trading strategy and how it works, because a good trading strategy will help the trader know how best they can make use of the stoploss, from my experience, stoploss is so much important, but knowing how right to make use of it is more important.

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  11. #3920
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    Quote Originally Posted by Striker$ View Post
    First of all, the ways of using stoploss correctly is by making sure that you have taken the learning in accordance with the trading strategy and how it works,
    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

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