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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. #21
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    andry777,
    so we need to have good analysis and do not so rush , this will make us get maximum earning,
    maybe this is my experiences or the others too, we always so hurry up to close the position on floating positive or in profit then just give us several pips or profit only but we let the order runs with big floating minus because hope the price will move back,
    and if we can change this situation, so i do believe that we can maximize our earning from this business

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  3. #22
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    the decision on running of the exit strategy as to closed of the loss order with the trading, those to had with the deeper on supports with the consideration as trader to prepare of the better on further to work of more with the rest on resources to complete of the left of number with the target to complete with the terms of the trading plan.
    as those to follows of the rules as presettled with the strategy with the beginning of the trading plan.

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  4. #23
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    Quote Originally Posted by newentry View Post
    andry777,
    so we need to have good analysis and do not so rush , this will make us get maximum earning,
    maybe this is my experiences or the others too, we always so hurry up to close the position on floating positive or in profit then just give us several pips or profit only but we let the order runs with big floating minus because hope the price will move back,
    and if we can change this situation, so i do believe that we can maximize our earning from this business
    Yes, I experienced that too. It is easy to be in rush to close position soon when condition in profit but it's longer time to hold floating minus condition because hoping better condition to prevent loss. It is important to stick on the rule, no matter the condition will be better or worse. It is easier to control our result of trading. Cut loss is okay for me, but I don't think if it is good idea to do it oftenly except if you're scalpers.

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  5. #24
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    I see that everyone should use the stop loose to cut the loose and don't make the loose continue in that market,Stop loose is the only way that make you don't loose more than you determine ,All you need just analysis the market well and determine your stop loose and you take profit and your entry points and then leave the screen,

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  6. #25
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    Quote Originally Posted by alaa_22 View Post
    I see that everyone should use the stop loose to cut the loose and don't make the loose continue in that market,Stop loose is the only way that make you don't loose more than you determine ,All you need just analysis the market well and determine your stop loose and you take profit and your entry points and then leave the screen,
    Stop Loss is different with cut loss although it looks same. Cut loss is done manually when you stopped transaction in loss condition but Stop Loss is done automatically with setting in certain price. If there is high movement of price, cut loss can give you different price with your expectation but Stop Loss will give you exact same price as your setting except if the broker is cheating.

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  7. #26
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    Certainly cut loss is very much essential according to me because only then the trader will be able to cut on the losing position and let their profit making position run longer such that surviving and making good gains in the forex trading business becomes possible and evident for the traders. Hence, we all should be very much sure of the proper risk and money management implementation for becoming profitable and successful forex trader.

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  8. #27
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    Quote Originally Posted by Ashviniurs View Post
    Certainly cut loss is very much essential according to me because only then the trader will be able to cut on the losing position and let their profit making position run longer such that surviving and making good gains in the forex trading business becomes possible and evident for the traders. Hence, we all should be very much sure of the proper risk and money management implementation for becoming profitable and successful forex trader.
    It is true that cut loss is used to cut on losing position but you can use stop loss too to do it right? Do you use hedging strategy because you cut losing position and let profit run longer? What is your consideration to close profit position because it is possible if the market is moving oppositely after you cut loss and your profit is becoming loss condition if you don't close it soon.

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  9. #28
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    Quote Originally Posted by andry777 View Post
    I mean cut profit not cut loss when it is profit condition
    Yeah, you have used the better words to explain the exit strategy in floating profit. To set the trailing profit or to close the floating profit, you may reconsider about support and resistance aldo candlestick formation to put your exit strategy whether floating loss or floating profit.

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  10. #29
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    Quote Originally Posted by andry777 View Post
    Yes, I experienced that too. It is easy to be in rush to close position soon when condition in profit but it's longer time to hold floating minus condition because hoping better condition to prevent loss. It is important to stick on the rule, no matter the condition will be better or worse. It is easier to control our result of trading. Cut loss is okay for me, but I don't think if it is good idea to do it oftenly except if you're scalpers.
    Actually I think its depend upon our trading strategy too we can set proper stop loss and take profit levels in trading but some time to due to bad market response we can cut our profit anytime. But the better thing will be to secure your profit by locking it. I like to lock my profit all the time it can work very fine in short term and long term both

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  11. #30
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    Quote Originally Posted by Khimi234 View Post
    Actually I think its depend upon our trading strategy too we can set proper stop loss and take profit levels in trading but some time to due to bad market response we can cut our profit anytime. But the better thing will be to secure your profit by locking it. I like to lock my profit all the time it can work very fine in short term and long term both
    Every trader can use different strategy according to his preference,but proper setting of stop loss must not exceed in the 5% recommended money management approach otherwise your account may suffer bigger drawdown that can eventually lead to capital wiped out, securing our profits when trades moves in our favor is also important especially when there is an schedule release of economic news.

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

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