Stop losses not only help you limit your losses and help you move on, they also eliminate the anxiety caused by losing on an unplanned trade.
What is a Stop Loss?
Thinking where to place stop losses is one of the most important things that you should do before even entering a trade. “Live to trade another day,” is something you should always remember in trading.
How To Set A Stop Loss Based On A Percentage Of Your Account
Never ever set stops based solely on the amount you’re willing to lose. Setting stops based on your account balance is a sure fire way to lose!
How To Set A Stop Loss Based On Support And Resistance From Charts
One of the best ways to set stops is based on charts. Find the places where prices can’t seem to push or break and then decide where to place your stop.
How To Set A Stop Loss Based On Price Volatility
Did you know that you can set stops based on the volatility of a certain pair? Knowing how much a currency pair tends to move can help avoid being prematurely taken out of a trade by the random movements of price.
How To Set A Stop Loss Based On A Time Limit
Time is of the essence, even when trading forex. Set up a time limit to cut off those dead-weight trades so your free to move on to new opportunities.
4 Big Mistakes Traders Make When Setting Stops
There are a lot of mistakes traders make when setting stops. Here’s a list of the most common ones.
3 Rules To Follow When Using Stop Loss Orders
Often times, the market doesn’t move in accordance with your expectations. You have to know the times that you should stick to your pre-determined limit orders or make stop adjustments on-the-fly.
Summary: Setting Stops
Like anything else in trading, setting stop losses is a skill. If you continually practice the correct way to set stops, you’ll be one step closer to becoming a professional risk manager!
