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Thread: Is it necessary to use cut loss in trading?

  1. #1
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    Is it necessary to use cut loss in trading?

    In trading, cut loss can be good or bad for traders. In your opinion, is it necessary to use cut loss in trading? Do you think if cut loss gives more benefits or not? As I experienced, cut loss can prevent bigger losses when the price is out of expectation. But cut loss can prevent us to face Target Profit too if we are too hurry to cut loss when the price is moving back to our TP point. This is two edges of cut loss in trading for me, so do you think cut loss necessary in trading?

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  2. #11
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    This is a very good means to secure the trade of the trader, when you cut your trading losses, it falicitate a better trading chance the next day, it is very important to be strong in emotion in trading, that is the way the trader have the better change of cutting the lose, if not, emotion will not let you cut it, and you mightvlose the more till margin call.

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  3. #12
    Trader Hukam's Avatar
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    First of all you should decide that which type of trader you are in forex. Try to know about your trading style I choose long term trading methods which help to cut my trades and losses my manually even stop loss use is also not bad at all but you should have a good sense that which sessions are better for trading and according to that you can take decision about cutting your losses

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  4. #13
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    Quote Originally Posted by hasnainbwn View Post
    in the forex trading when you cut lose or stop lose is very useful in the forex trading when we out and not on the pc when we use stop lose in the forex trading and we save our profit in the forex trading its good way of earning in the forex trading and earnin money more and more,
    Cut loss can save our profit but it can prevent us to gain bigger profit too if we are too hurry in cutting loss and then, the price is moving back to the initial movement (correction movement) and it reached on Target Point. So, it's depending on our psychology control to be ready to face the risk in order to take bigger profit or not.

    Quote Originally Posted by Hukam View Post
    First of all you should decide that which type of trader you are in forex. Try to know about your trading style I choose long term trading methods which help to cut my trades and losses my manually even stop loss use is also not bad at all but you should have a good sense that which sessions are better for trading and according to that you can take decision about cutting your losses
    Yes, it is right too. If we are long-term traders so there is tendency to set Stop Loss than cut loss manually but sometime, we must be realistic to look on current condition of market. If the condition is not same with our analysis and it has low possibility to move back then we shouldn't force to hold condition but we can cut loss soon.

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  5. #14
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    Quote Originally Posted by andry777 View Post
    Cut loss can save our profit but it can prevent us to gain bigger profit too if we are too hurry in cutting loss and then
    Cut loss is exit strategy in floating minus. If youe order floating positive and you want to liquidate your order, what you are doing is not cut loss. Please re understand the meaning of cut loss and exit stratgey and also understand the taking profit (tp). You can use trailing stop to insecure your floating profit

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  6. #15
    Trader techboy's Avatar
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    Every good strategy in trading has stop loss level, these stop loss level is configured based on what time frame at traders preference, so we dont need to cut our losses manually we have to let the trade work according to specified stop loss level, but if you are trading without stop loss level and by discretion you will close the trade if you feel that the market is not really on your side,but these kind of approach can be dangerous to use especially for beginners.

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    " Trading is 70% Psychology, 15% Risk Management and 15% Strategy ! "

  7. #16
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    This is a very certain thing, it will help the trader to have serious mindset about trading if the losses are not much, but the profits are massing. Forex trading needs the good managerial plans of the trader, this plan will be best helped when the trader cuts the losses very fast. But mind you, do not cut losses unreasonably, it might affect you well.

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  8. #17
    Trader techboy's Avatar
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    Quote Originally Posted by Hukam View Post
    First of all you should decide that which type of trader you are in forex. Try to know about your trading style I choose long term trading methods which help to cut my trades and losses my manually even stop loss use is also not bad at all but you should have a good sense that which sessions are better for trading and according to that you can take decision about cutting your losses
    Agree, trader can implement stop loss at his chosen level but it does not mean that he cannot close out early, sometime the market tells us that its going against our trade, so we can decide to close it right away to avoid bigger lose if we waited for our original stop loss to be hit. We just have to be careful in making such decision because there are also time that the market retrace back to the direction of our trade before it hits our stop loss.

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    " Trading is 70% Psychology, 15% Risk Management and 15% Strategy ! "

  9. #18
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    [lang=ar]i think hat the alternative is to follow the trading with your self and do not put any stop losse aor even take profit orders . for we may study the movement of a certain pair we find that the price may go up and then sure it will go down again . here if we put the stop loss we really losers but when we follow them by moment we avoid this type of loss[/lang]

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  10. #19
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    [lang=id]for them who did trading without stop loss, so cut loss is the best one for them, it is very necessary for them to protect balance from unwanted situation, i do agree if cut loss is more flexible than stop loss, but traders have to be careful for some situation where the market moves so faster, so there is advantages and disadvantages from it[/lang]

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  11. #20
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    Quote Originally Posted by aris90 View Post
    Cut loss is exit strategy in floating minus. If youe order floating positive and you want to liquidate your order, what you are doing is not cut loss. Please re understand the meaning of cut loss and exit stratgey and also understand the taking profit (tp). You can use trailing stop to insecure your floating profit
    Oh sorry about that. I mean cut profit not cut loss when it is profit condition. And about cut loss to prevent us to gain bigger profit can happen when condition is profit and then it moved to opposite direction for correction movement but I am too hurry to cut loss before the condition is worse in my mind. But in reality, it moved back and hit on TP point. It is possible because I ever experienced that.

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