Importance of stop loss placement in forex trading.

[asiaforexmentor]

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 B) 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

[Morshedul]

Previously i have no idea about stop-loss. And then i loss a lot of money. Now i realize that if i use stop-loss method, then i probably overcome that loss. Now i use stop-loss and target profit both on my trading. And doing well in the market. Stop-loss basically minimizes the amount of risks or losses in forex trading. But if you invest decent amount of capital, then its your wish whether you use stop-loss or not. It is not that much necessary.

[sura]

When we decide to use stop loss, then we must be discipline in implementing it. If market price is heading so close to our stop loss, then we must not do anything. Do not ever try to replace your stop loss at further level from your open position level.

Replace your stop loss only for one reason:
For Trailing Stop Strategy (although I hardly ever use trailing stop strategy).

Previously i have no idea about stop-loss. And then i loss a lot of money. Now i realize that if i use stop-loss method, then i probably overcome that loss. Now i use stop-loss and target profit both on my trading. And doing well in the market. Stop-loss basically minimizes the amount of risks or losses in forex trading. But if you invest decent amount of capital, then its your wish whether you use stop-loss or not. It is not that much necessary.

[winwinwindu]

When we decide to use stop loss, then we must be discipline in implementing it. If market price is heading so close to our stop loss, then we must not do anything. Do not ever try to replace your stop loss at further level from your open position level.

Replace your stop loss only for one reason:
For Trailing Stop Strategy (although I hardly ever use trailing stop strategy).

yes, most people are not consistent in their decisions, or rather do not want to lose
when prices are closer to their stop losses, they will replace their SL,
but it will increase their losses if prices will continue to rally

[umarjaved1]

stop loss is very important for the forex trading because the beginner of the trading must feel that forex trading is very easy to earn the profit but when they loose their capital in forex trading then the think that about the forex trading indicator and tools so better to use the trading indicator

[priyanthask]

Stop loss is very very imports in trading because it helps to minimise the losses.But if you have very big capital you don't need to worry much about that.But learn to use stop loss is very important to become good professional trader.At the beginning I didn't use stop loss but gradually I learn to use stop loss and it helps me to reduce my losses.

[hmbelal]

now i realize that if i use stop loss method then i probably overcome that loss now i use stop loss and traget profit both on my trading and doing well in the market stop loss basically minimizes

[abcforex]

You are saying right but according to me that if you use stop loss tool then it means you have defined how much loss you will bear, i am not using this tool , i only use take profit when ever i away from the computer. But stop loss is some way important to avoid your whole account collapse.

[ahda]

Previously i have no idea about stop-loss. And then i loss a lot of money. Now i realize that if i use stop-loss method, then i probably overcome that loss. Now i use stop-loss and target profit both on my trading. And doing well in the market. Stop-loss basically minimizes the amount of risks or losses in forex trading. But if you invest decent amount of capital, then its your wish whether you use stop-loss or not. It is not that much necessary.

Yes. as what you ever sustain, Stop Loss point is very important in trading world. and sometime, we need to set an auto Stop loss. i also ever face a big loss when i did not place an auto stop loss. it was terrible cos my position already in profit, but, 5 minutes then the situation was change, suddenly the price falls without any news or data release schedule. i loss half of my fund as the consequence.

[abdullahforex]

ya be forex ka ak hesa he ha is ma ap ko boht fida hopt ha is ma ap zyda noksn sa bach jat ho is ma ap ko sab sohlt mojd ha opar ap ko is ka kamkar at ho to