Every day I get a lot of messages from the newbies from ower the world with the same problem... "I have opened a trade position without stop-loss! What should I do? A bigger part of my deposit gone!"
It's so sad to hear about it!
Stop-loss - an exchange request placed in a trading terminal by a trader or investor in order to limit their losses when the price reaches a predetermined level.
Almost all experienced Forex traders agree that it is necessary to set the stop loss in any style of trading.
Beginners who have only come to the market often neglect this rule, but over time they also come to
understand (or they just stop trading because of constant losses).
Ways to Stop Loss
To trade on any financial market (not only on, but also on commodity futures, the stock market or even exchange) a system is required.
As a rule, each quality trading strategy has rules for setting a stop loss, but there are universal techniques that will fit almost any vehicle.
The easiest way to set the stop loss is on the local minimum (when buying) or maximum (when selling).
Finally, it's important to realize that stop-loss orders do not guarantee you'll make money in the stock market; you still have to make intelligent investment decisions.
If you don't, you'll lose just as much money as you would without a stop-loss (only at a much slower rate).
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My previous educational ideas
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This is a good example of how to set your stop-loss perfectly
@jostino, What is your usual procedure after the stop loss has been triggered. Do you place a buy stop order in case the market rises again or do you wait and see?