asiaforexmentor Posted January 31, 2012 Share Posted January 31, 2012 FOREX TRADING: IMPORTANCE OF STOP LOSS PLACEMENT A lot of traders do not believe in stop loss placement. Some believe in mental stop loss placement. meaning that when they feel that a trade is not going their way, they will then cut it off. That is so terribly wrong. Stop loss placement is one of the most crucial key if you want to make forex trading profitable. Another mistake traders make is that they shift their stop loss. They shift it backwards, thinking that the trade will just go back a little more and will come back their way. And sure enough, most of the time, they took more losses than they would have if they stayed on their initial stop loss. In the chart above, is an example of the importance of stop loss placement. Usd chf h4 In the highlighted box, thats a pin bar. When some guys see this pin, they will naturally take it down and the ideal place for their stop loss is the horizontal line in orange that is drawn. Scenario A) if the trader did not place a stop loss, or a mental stop loss – look at how high the usd chf pair went upwards. Their account will be blown or had a huge huge loss. Scenario Trader shifted their stop loss backwards from the initial orange line thinking that the trade will go back down. They would have taken a huge loss as the move went up terribly fast and would have gotten a big blow to their account Scenario C) Trader sticked to their initial stop loss, they would have just gotten a standard loss of the % risked in their account, based on their money management. And this is just one of the trades among the plenty, therefore this loss is not a big deal. I hope you guys can see the importance of placing and sticking to your stop loss. Or else your account will be blown before you know it. Ezekiel Chew Asia #1 Forex Mentor from www.asiaforexmentor.com 13 Quote Link to comment Share on other sites More sharing options...
stezz Posted February 12, 2012 Share Posted February 12, 2012 i never use stop loss and the effect is i loss 50 $ in my first day of trading and now i just realize that stop loss is very important Quote Link to comment Share on other sites More sharing options...
pinoycity Posted February 24, 2012 Share Posted February 24, 2012 i never use stop loss and the effect is i loss 50 $ in my first day of trading and now i just realize that stop loss is very important What happened and why did you lose that amount in your first trading day? I would assume that you entered the market, did not set an SL and left and closed your computer. Quote Link to comment Share on other sites More sharing options...
rexway Posted March 11, 2012 Share Posted March 11, 2012 stop loos for me is a good way to safe guard your fund ,stop loos play an important roles when it come to trading, with the help of stop loos one can minimise the risk of loosing Quote Link to comment Share on other sites More sharing options...
budado Posted March 11, 2012 Share Posted March 11, 2012 i never use stop loss and the effect is i loss 50 $ in my first day of trading and now i just realize that stop loss is very important 50 dollars? how di you trade 50 dollars? what pair did you trade and what broker site? And also how much do you have overall in your account? I'm sure you have more than 50 dollars becuase even if you get MC you will never going to have zero funds right away. Quote Link to comment Share on other sites More sharing options...
adnan007 Posted March 21, 2012 Share Posted March 21, 2012 I never placed Stop Loss in my trades when I was a newbie but later understood the importance of placing a SL, when I had to suffer a few account blow ups. For a newbie or even for the professionals, placing a SL is a vital option as it Leads to avoiding losses far beyond expectations... Quote Link to comment Share on other sites More sharing options...
budado Posted March 21, 2012 Share Posted March 21, 2012 What happened and why did you lose that amount in your first trading day? I would assume that you entered the market, did not set an SL and left and closed your computer. Its seems he only not forgot to put stop loss he also stop post in here. lols. .... That's why when I trade and after decide what strategy to use and in case that strategy need to put SL and suddenly the price goes near my SL. instead of changing my SL. I close my mt4. Because I know if I don't do that I will simply go emotional and trade with my emotion. lols. Quote Link to comment Share on other sites More sharing options...
adnan007 Posted March 26, 2012 Share Posted March 26, 2012 Its seems he only not forgot to put stop loss he also stop post in here. lols. .... That's why when I trade and after decide what strategy to use and in case that strategy need to put SL and suddenly the price goes near my SL. instead of changing my SL. I close my mt4. Because I know if I don't do that I will simply go emotional and trade with my emotion. lols. Changing SL can work against you as I myself have tried it in the past out of emotions and the bad thing about my this practice resulted only in a greater loss for me. Sometimes it might work for you but risking a few more bucks far beyond your expectations can become really frustrating as it has been for me in the past... Quote Link to comment Share on other sites More sharing options...
flybiz08 Posted March 28, 2012 Share Posted March 28, 2012 Stop loss is a type of pending order that he forex trader places in anticipation that if a trade or an open position goes the other way round to the negative side, then the trade should be closed automatically at the set order price which is the stop loss. It prevents a trader from losing more than required amount while trading. Quote Link to comment Share on other sites More sharing options...
PROPENSITY100 Posted February 25, 2013 Share Posted February 25, 2013 Stop loss is a vital tool available to a trader to manage risk more efficiently. Stop loss can save us from a severe loss. However stop loss should be used judiciously and efficiently placed otherwise it can close a good order with a loss. Quote Link to comment Share on other sites More sharing options...
standart Posted February 28, 2013 Share Posted February 28, 2013 Stop loss is a vital tool available to a trader to manage risk more efficiently. Stop loss can save us from a severe loss. However stop loss should be used judiciously and efficiently placed otherwise it can close a good order with a loss. yes, stop loss is really important to protect traders from suffering huge loss and keep their account in control. stop loss placement is really good topic and has been widely discussed in many forex forum. many beginner already ask about it and I think the answer already appear in thread above. previous support or resistance level is good spot to place stop loss level. Quote Link to comment Share on other sites More sharing options...
riddick09 Posted March 2, 2013 Share Posted March 2, 2013 I always think of stop loss as life saver. Since, stop loss is a way to handle our losses and that we will not going to drain or reach margin call easily. Since, we can't always monitor our trades and the best way to not have these big losses is to have stop loss order and to have also the take profits which will back up our analysis. Quote Link to comment Share on other sites More sharing options...
PROPENSITY100 Posted April 4, 2013 Share Posted April 4, 2013 Stop loss is very important tool to limit our losses and survive in Forex market for a long time. Stop loss enables us to protect our capital and saves us from a severe loss. However a trader should know how to use a stop loss properly. Quote Link to comment Share on other sites More sharing options...
Achiever2015 Posted April 5, 2013 Share Posted April 5, 2013 Stop Loss truly serves a great help in managing our loss and profits and thus reduce our exposure to trading loss. Stop Loss in themselves, however, are not the guarantee of reducing loss themselves, the trader must ensure the SL is placed rightly, not allowing greed or fear to influence the decision. Quote Link to comment Share on other sites More sharing options...
pepy Posted April 10, 2013 Share Posted April 10, 2013 This is one of the great feature that will so much helpful for many newbie or even for expert too, it will make them more easier to set and minimize the risk that they can hold from forex, so overall i can say this feature is a great help and also like blessing for many traders in forex. Quote Link to comment Share on other sites More sharing options...
savehouse Posted April 10, 2013 Share Posted April 10, 2013 This is one of the great feature that will so much helpful for many newbie or even for expert too, it will make them more easier to set and minimize the risk that they can hold from forex, so overall i can say this feature is a great help and also like blessing for many traders in forex. st yeah,i totally agree with you,stop loss the one of the feature in Forex trading that can guarantee safety low loss and high profit.though one need to understand how to use it and understand how the trending of the market work for one to know the best entry time and the best time to apply stop loss when trading.aside from the indicator we have as a trader,stop loss is the best feature that can also safe us from much loss. Quote Link to comment Share on other sites More sharing options...
pepy Posted April 16, 2013 Share Posted April 16, 2013 st yeah,i totally agree with you,stop loss the one of the feature in Forex trading that can guarantee safety low loss and high profit.though one need to understand how to use it and understand how the trending of the market work for one to know the best entry time and the best time to apply stop loss when trading.aside from the indicator we have as a trader,stop loss is the best feature that can also safe us from much loss. In the end for new traders it is very important to use this feature, in every trading since they don't know how to manage their funds well sometimes or in most cases they will have a lot of problem with it and with Stop Loss feature that offered in some platform will truly help them to have better trading. Quote Link to comment Share on other sites More sharing options...
rexway Posted April 20, 2013 Share Posted April 20, 2013 Yea the function of stoploss can never be mention all if a trader is using stoploss he can trade without much fear so as per this I do hope that I will try my best and get good stoploss level set for proper trade Quote Link to comment Share on other sites More sharing options...
pepy Posted April 28, 2013 Share Posted April 28, 2013 Yea the function of stoploss can never be mention all if a trader is using stoploss he can trade without much fear so as per this I do hope that I will try my best and get good stoploss level set for proper trade at least it will make them more comfortable when they want to learn and also we need to know that forex actually is risky field so we need to reduce the risk in each trading we do and actually that is a hard part to do, and they prefer this way since this way is easy for new traders Quote Link to comment Share on other sites More sharing options...
gaban Posted May 1, 2013 Share Posted May 1, 2013 50 dollars? how di you trade 50 dollars? what pair did you trade and what broker site? And also how much do you have overall in your account? I'm sure you have more than 50 dollars becuase even if you get MC you will never going to have zero funds right away. The problem is not how much money we've got to get a return but how do we manage the funds in our account so that we can get the maximum return. Even, i just used $35 to start trading with my broker now. Quote Link to comment Share on other sites More sharing options...
luke1 Posted May 3, 2013 Share Posted May 3, 2013 It is very important for the trader to use the stop loss. Or at least to minimize the loss we will face on the market. Because if not, if our money is limited on forex trading, then it will be danger for us. So, the thing we have to realize here, stop loss is very important to be used on every trade in forex business Quote Link to comment Share on other sites More sharing options...
pepy Posted May 8, 2013 Share Posted May 8, 2013 It is very important for the trader to use the stop loss. Or at least to minimize the loss we will face on the market. Because if not, if our money is limited on forex trading, then it will be danger for us. So, the thing we have to realize here, stop loss is very important to be used on every trade in forex business especially for newbie who still cannot manage their own risk, if they can manage the risk well maybe they can forgot what is that stop loss for them, but in fact mostly traders cannot manage the risk well so that is why they try stop loss feature that will help them to manage the risk of their action. Quote Link to comment Share on other sites More sharing options...
davils9 Posted May 26, 2013 Share Posted May 26, 2013 it is most important to know how to work at here.so we need a demo account for practice and when it will be complete we can open a real account and can start a trading and earn more and more by the forex Quote Link to comment Share on other sites More sharing options...
adnan007 Posted June 1, 2013 Share Posted June 1, 2013 Stop Loss placement is one of the most important thing a trader should place when taking a position. This not only allows a trader to avoid losses which certainty is unacceptable but at the same time helps us to avoid complete account blow ups in case of a high volatile move due to the release of a high impact news... Quote Link to comment Share on other sites More sharing options...
gaban Posted June 4, 2013 Share Posted June 4, 2013 Stop loss is very effective tool for trading it is necessary that we must set the stop loss because it can minimize the risk that we will get when trading. It's part of money management. And we should be discipline when apply our money management Quote Link to comment Share on other sites More sharing options...
Recommended Posts
Join the conversation
You can post now and register later. If you have an account, sign in now to post with your account.