Ten Stop Loss Tips | Forex Factory

Ten Stop Loss Tips | Forex Factory

Ten Stop Loss Tips

From newtraderu.com

A stop loss is a risk management tool that keeps your losing trades small. The point of a stop loss is defensive and to eliminate stop losses from your trading. Here are ten tips for thinking about when placing a stop loss on a trade: 1. Your stop loss should be a part of your trading plan on entry not figured out later. 2. The best time to set a stop loss is before you get emotionally wrapped up in the outcome of a losing trade. 3. A stop loss should be placed at a price level that price shouldn’t go to if the trade is going to work out in your favor. 4. A stop loss should be placed at a key technical level not ... (full story)

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Feb 22, 2020 11:07am — Edited

Stop Loss = SL = Surrender & Lose

Use Buy Stop and Sell Stop instead (provided you are allowed to hedge). When you reach your profit target of one of the sides then you’ll find a way to deal with the other side.
Remember two important things.
1. Stop Loss causes realized loss of capital which you’ll never get back.
2. Buy Stop or Sell Stop cause only an unrealized pending minus which you may find a way to recover.

Thank me later

4

Feb 23, 2020 8:19am — Edited

Quoting clockwork71

Disliked

This thread is why a lot of experienced traders have drifted away from this site.

Ignored

Yes because most of the experienced traders become selfish and not willing to share when they become successful. The market is much bigger than a single successful trader and there is enough place and money for most of us.

Most people come here to gather experiences, not to share their own. Traders that are willing to share their secrets for free are hard to find. That’s why one should be happy if some of them are still here.

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Feb 22, 2020 2:25pm

Quoting photoshop

Disliked

FROM NEWS ITEM: A stop loss is a risk management tool that keeps your losing trades small. It is also a mechanism for big traders to fill orders at a good price.

Ignored

Big traders?

Yes eaxactly. Big and pro traders are the ones who DO NOT use stop losses for the most of the time.

https://fxnews.exness.com/why-pro-traders-dont-like-stop-loss/

You can really have very good (much better) money management by using alternative smart approaches and stop loss is not necessary part of such approaches.

Stop loss is for newbies because that’s the first thing they stumble over when they try to find out what money management is.

However if you really want to improve and move to the next level, you need to protect your capital in a better and more effective way.

SL takes you capital and there is no return.
Buy Stop and Sell Stop keep you capital in your pot until you find a way to recover the pending minus. Simple as that.

If you want to learn about alternatives to SL money management there is nothing in your way. There is a lot of good stuff on the internet. And a lot of bad of course. But again it is up to you to filter out and lift yourself to the next level.

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Feb 23, 2020 8:47am

Doesn't it depend on the timeframe and level of leverage being employed?
A lot of our trading is very low leverage position trades linked to bond and equity positions and use buy/sell stop fading techniques..
From observation, most folk here seem to scalp /day or intraday day?
Contrary to some advice above, I wouldn't trade high leverage levels on day trades without a stop to guard against an extreme event risk.
Id also endorse folk try @NotAtrader BS/SS technique in post #14 above. we sometimes use similar.

2

Feb 23, 2020 4:53am — Edited

Quoting photoshop

Disliked

{quote} Yes I understand. My question was directed at your comment that after you have taken profit, you may find a way to manage your floating loss of the hedge trade. This sounds risky for 2 reasons. 1) you set your sell stop tp at next important support level, but then market smashes through it and keeps going down. Do you want for possible bounce off next support level? 2) You MAY find a way to recover your floating loss. This statement of yours tells readers that also, you may NOT. I think you have good honest response with your choice of words,...

Ignored

Yes mate trading is a risky business. I am not going into details but I can tell this - yes floating loss can become big, but so can three or four stop losses in a row. In order to prevent this, I use buy stop or sell stop instead of SL. In the end of the day you need to put on a quality entries, but sometimes shit happens.
The main point is that the money is not lost until the trade is running. The supposed risk of 2% - 3% of the account per trade can be managed with buy stops and sell stops. The hedge will limit the losses just the same way like the SL. The difference is that the capital is not lost, speaking of which - yes after a wrong trade, my buy stop of sell stop gets hit. I analyze the chart again as the first analysis was obviously wrong. Then I place TP for the hedge at the price where I believe the market will return as well as my new buy stop or sell stop for the first wrong trade (instead of another stop loss).

It is important to understand the difference between the two approaches.

1. SL approach allows 2% - 3% of the balance risk per trade. But remember this is because when the SL gets hit, the money is gone forever.

2. Buy Stop or Sell Stop approach allows you to keep the money in your balance which allows you to take the same risk on the next trade too.

3. Another advantage is that you can use quite tight Buy Stops and Sell Stops. And if it goes wrong, the accumulated pending minus will not be big and will really easy to recover when the market returns.

You can possibly make 2 or 3 wrong trades in row, but eventually the market will return in your direction and you will recover the losses which are already limited thanks to the hedging.

That’s all man. Try it with a small bet. You’ll see it works.

1

Feb 23, 2020 1:17am — Edited

The clue is in the name.
It's a stop LOSS
You want a loss, the market will give it to you. Your money is gone, that's what you wanted, good job.
Instead, better to use a stop "win" (not necessarily a take profit)
and - most important ==> stop placing crap trades.

1

Feb 22, 2020 2:19pm

Quoting NotAtrader

Disliked

Stop Loss = SL = Surrender & Lose Use Buy Stop and Sell Stop instead (provided you are allowed to hedge). When you reach your profit target of one of the sides then you’ll find a way to deal with the other side. Remember two important things.
1. Stop Loss causes realized loss of capital which you’ll never get back. 2. Buy Stop or Sell Stop cause only an unrealized pending minus which you may find a way to recover. Thank me later

Ignored

Nice hedging advice.

My own advice is to look at big news , wait.... Enter.

And FIND RIGHT direction

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Feb 23, 2020 8:26am

Addressing this issue today is for them to consider closing purchase transactions before markets fall too much.

1

Feb 22, 2020 9:49am

Use the “strong” S/R found in the Weekly as initial stop-loss level. Once the trade turned positive on the Daily, we can start trailing it based on the Daily range ...

1

Feb 22, 2020 2:17pm

Photoplop?

the face of people who don't understand Bitcoin and the current times...

http://media.boingboing.net/wp-content/uploads/2013/01/2013-01-17-1730421.jpg

Feb 22, 2020 2:38pm — Edited

Quoting photoshop

Disliked

{quote} .................... Buy stop triggered, then sell stop triggered, hits sell stop take profit the keeps dropping like a stone..................

Ignored

Mate if you are good enough to know where to put your Stop Loss, you should know then where to put your Buy Stop or your Sell Stop as well as your profit target so that the market does not run away from you.

Take care

Feb 23, 2020 6:22am

Quoting NotAtrader

Disliked

{quote} Yes mate trading is a risky.. e...

Ignored

Do you know you're talking MAYBE to Tupor?

YES that Tupor

Feb 23, 2020 7:49am

Quoting Not-KPMG

Disliked

Hi NaT You pay few spread, commission, swap too buddy...

Ignored

Yes indeed. But that’s nothing compared to the profit you get when it returns. It’ll all cost you one or two pips.

I can put on the last word here. The first thing big traders (which I believe I am) think of, is protecting the capital and then they think of securing the profits.

This has become my main tactic ever since I took my first and only big defeat in forex trading where I lost nearly $500K. Since then, I recovered and I have never lost money again. I will be happy if this helps anyone to become a better trader.

Feb 23, 2020 8:08am

Doesnt it depend on the timeframe and level of leverage being employed?
A lot of our trading is very low leverage position trades linked to bond and equity positions and use buy/sell stop fading techniques..
From observation, most folk here seem to scalp /day or intraday day?
Contrary to some advice above, I wouldnt trade high leverage levels on day trades without a stop to guard against an extreme event risk

Feb 23, 2020 2:43pm — Edited

It's important to keep the sheep traders properly brain-washed about stop losses, and the importance of using them, <sarcasm>after all it makes the lives of the banks and big dealers / funds so much easier as they can see where they have to push the market too to take your money ! </sarcasm>. Continue as you were....
Use a stop loss to lock in profits not to define losses, but YOUR choice.

Feb 22, 2020 3:12pm

Quoting photoshop

Disliked

{quote} When you reach your profit target of one of the sides then you’ll find a way to deal with the other side. How do you justify this? Buy stop triggered, then sell stop triggered, hits sell stop take profit the keeps dropping like a stone. How do you recover buy stop loss if market does not look back?

Ignored

My advice is to never trade without a SL and never risk more than 3% of ur capital per trade.

Feb 22, 2020 1:55pm

Quoting NotAtrader

Disliked

Stop Loss = SL = Surrender & Lose Use Buy Stop and Sell Stop instead (provided you are allowed to hedge). When you reach your profit target of one of the sides then you’ll find a way to deal with the other side. Remember two important things. 1. Stop Loss causes realized loss of capital which you’ll never get back. 2. Buy Stop or Sell Stop cause only an unrealized pending minus which you may find a way to recover. Thank me later

Ignored

When you reach your profit target of one of the sides then you’ll find a way to deal with the other side.

How do you justify this?
Buy stop triggered, then sell stop triggered, hits sell stop take profit the keeps dropping like a stone.

How do you recover buy stop loss if market does not look back?

Feb 23, 2020 12:35am

Quoting NotAtrader

Disliked

{quote} Mate if you are good enough to know where to put your Stop Loss, you should know then where to put your Buy Stop or your Sell Stop as well as your profit target so that the market does not run away from you. Take care

Ignored

Yes I understand.
My question was directed at your comment that after you have taken profit, you may find a way to manage your floating loss of the hedge trade.
This sounds risky for 2 reasons.
1) you set your sell stop tp at next important support level, but then market smashes through it and keeps going down. Do you want for possible bounce off next support level?
2) You MAY find a way to recover your floating loss. This statement of yours tells readers that also, you may NOT.

I think you have good honest response with your choice of words, but it means it is risky. A floating loss can become a BIG loss.

Feb 23, 2020 12:52am

Quoting mga35

Disliked

{quote} My advice is to never trade without a SL and never risk more than 3% of ur capital per trade.

Ignored

I dont use a stop loss much, I wait for closing bar on the daily or weekly and trade small volume.
I look at key support and resistance and wicks of the price bars (these tell us much about market intentions), then we hop onto the train.

I miss a few early train stations, but I ride it much of the way home. Risk/reward is very important.

Feb 23, 2020 5:28am

Quoting NotAtrader

Disliked

{quote} Yes mate trading is a risky business. I am not going into details but I can tell this - yes floating loss can become big, but so can three or four stop losses in a row. In order to prevent this, I use buy stop or sell stop instead of SL. In the end of the day you need to put on a quality entries, but sometimes shit happens. The main point is that the money is not lost until the trade is running. The supposed risk of 2% - 3% of the account per trade can be managed with buy stops and sell stops. The hedge will limit the losses just the same...

Ignored

Ok thanks I understand better now, thanks for taking the time to make it clear.
I won't trade this way, I am happy with what I do, I was really just interested in understanding your reasoning. Sorry, I hope not too much waste of your time. Thanks.

Feb 23, 2020 6:20am

Hi NaT

You pay few spread, commission, swap too buddy...

Feb 23, 2020 8:14am

Don’t trade based on instant analysis, but on statistics of repeating market behaviors ...

Feb 22, 2020 1:56pm

FROM NEWS ITEM: A stop loss is a risk management tool that keeps your losing trades small.

It is also a mechanism for big traders to fill orders at a good price.

Feb 22, 2020 10:56am

a stop loss is what China did not have at the beginning of the appearance of COVID-19,
What do you think now of having it or not? in your trades?

1

Oct 7, 2020 9:29am

Guys... its all about managing skills. ....
Watch this prop trader without stop loss..live...
www.twitch.tv/am_trading
@allinazi

Feb 23, 2020 8:04am

This thread is why a lot of experienced traders have drifted away from this site.

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