Importance of stop loss placement in forex trading.

[goldenmember]

This is one of the most important points in forex, or in trading anything even if its gold, oil, stocks or anything. You really need to trade with a stop loss. The reason is that the market does move a lot. You might think that the market only moves 1000 pips a few times a year, but that means if you do not use a stop loss you will lose your account a few times in a year!

[mariomuhafsa]

For me I've never experienced the MC to four times and all that I experienced because I never use stop lose now I just use stop lose at any time orders and that's how importants it is to add a stop lose really !

[forexstudentforever1]

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

Hello Everyone, stop loss is very important as it prevents you from loosing more and more money in your account. I guess this is a must especially to the beginners who is not an expert in trading and we know that beginners who do not use stop-loss have their account closed for the first week. It is not hard to use this so this is really recommended. Nice thread by the way. Well explained. Thanks a lot for sharing this kind of amazing this with us.

[ismail trader]

True, by installing StopLoss means we have to have a good trading plan is only ready for risking our capital that we put Stop Loss value, so do not worry too much if the price is moving quickly in the opposite direction our open, then SL will automatically close order with the receive measurable losses.

[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.

[yaqoobali95]

stop loss is definitely important in forex trading. one can save his account to blown off or from huge loss by using stop loss.

[fxlover]

using stop loss have a good and bad effect. bad effect is we lose our chance to recover our money. price may be pull back after touching our target. the good side is we can safe from losing huge money. personally i do not support to put stop loss. if we have proper money management system then we did not to put any stop loss.

[jimloveski]

People say that trader can't be successful without using stop loss. I think it is wrong. I would rather not to use Stop loss then use it in wrong way. Many newbies place SL in wrong way- this is reason of many looses. I prefer another type of Money & Risk Managment.

With position opened my account always have 1000 pips to hold on floating minus- this is 1000 pips as a defence. There is small risk of loosing position

[dhiraj]

trading main stop loss bahut jaruri hai. stop loss set kar ke aap tay karte hai ki ham kitna loss le sakte hai.
hamara analysis sahi ho liekn ho sakta hai kisi news se market main opposite movement ho or jis ke kaarn hame badaa loss ho sakta hai.esi condition main stop loss hi hame bacha skata hai.

[lap]

Before i also dont use SL because of thinking price will come to my point but many time i prove not correct because price come in that palce but to blow out my account and after that many time i always use now SL to protect my fund and keep my loss in certain level. and for this its very very necesary to use sl.