Best place to set Stop Loss

[Decub]

It is no doubt that the Stop Loss is a veritable risk management tool to minimize losses. It is however not compulsory on any trader but a necessity. That is the dream of all traders to have their degree of losses minimized to a great extent but in a long run, it becomes the most difficult thing for most new traders to do-setting it right.

To the traders in the house, where do you usually set your stop loss so as not to have it hit severally?

 

[Tom Prince]

The best place is usually well away from a previous support / resistance area

 

[Daisy]

It will all depends on the trade that I'm in. If I'm watching it, then I do not set it cause I can exit at any time so I feel confident without it. Only in large capital cases, do I try to set sl, and I do it very wide range like fifty pips or more to allow bouncing. In long term trade, I always set it but very wide like even over seventy pips to allow bouncing if I can cover it. However, its important if you use high capital.

 

[Suresh]

Stop-Loss can ba set both on market orders and on pending orders. I especially like when I put it on Pending Orders. In that way by pending order the terminal automatically opens a position and by Stop-Loss order automatically closes it. So these opportunities are very effective for me since I am always on business trips and the system automaticallu open and closes my positions. Together with Stop-Loss I often use Trailing Stop order as well. I use NetTradeX trading platform on which Trailing Stop is active even when the terminal is turned off.

 

[gkintl]

Placing a stop loss order is an unavoidable component of successful trading. However, most beginners find it very difficult to determine the exact stop loss price. In majority of cases, a spike triggers the stop loss order without a real change in the direction of price movement. To avoid this, two factors need to be considered. First one is the entry price. The entry price, if away from resistance or support, will invariably make stop loss price determination difficult and even ineffective. The entry should be price. Then only stop loss can be determined perfectly. The second factor is the historic volatility or beta component. As much higher beta is, so much volatile a currency pair would be. Thus, with higher beta, stop loss should be shifted at a much higher percentage from the entry. It would be rather uncomfortable sometimes but the end result would be pleasing. Determining precise stop loss point is not an easy task. Only experience and concentration on price movements would enable a trader to cross the hurdle.

 

[Daisy]

If you use high capital and leverage then you must use sl to prevent large losses and for long term trades obviously. I would not go without it and its like going on the freeway with no brakes. You need your brakes alright. In long term trades, it will protect you a lot. You can set it at any amount that you're willing to risk losing and this is up to you. However, wide range found to be more helpful than tight range.

 

[Ruchibhar]

get experience from your past mistakes. what else?

 

[Decub]

It doesn't only lie in getting experience from past mistakes if not traders wouldn't be losing after spending months in the Demo account. Sometimes, the nature of the market can just force your stop loss to be hit beyond your expectations. But then, I still believe that a progress of learning through practices will make a better target of where to set it.

 

[willy]

this is depending on the strategy which you are trading with it for example i am training with two digital strategies the first one the stop loss is 60 pips and the take profits is 30 pips but the win trades more than the loss trades and the second one the stop loss is 150 pips and the take profits is 40 pips

 

[Pettyeve]

Stop-Loss can ba set both on market orders and on pending orders. I especially like when I put it on Pending Orders. In that way by pending order the terminal automatically opens a position and by Stop-Loss order automatically closes it. So these opportunities are very effective for me since I am always on business trips and the system automaticallu open and closes my positions. Together with Stop-Loss I often use Trailing Stop order as well. I use NetTradeX trading platform on which Trailing Stop is active even when the terminal is turned off.

Just as you have rightfully stated. But you have to very able to understand that when using the stop loss with pending orders, it will not be good for you to put your trust in the orders when the volatility of the market is high. This can cause your stop to trigger and you will lose even with your stop loss.

 

[kasual]

No exact rule to define the best stop loss level. All work based traders understanding regarding with market movement. Set too tight will make traders stop loss being hit many times. Than protect capital, too tight SL even give many losses result. While if traders set SL too wide, will make them to be late to mark the changes in market.

 

[budado]

Stop loss can make us earn good amount of money if we know how to use it. Some people thing that if we get SL we end up losing. But proper way to use SL can also make us earn money still. For example if you have gain 50 pips profit already and your analysis say that it can go up to 100 pips. You put your TP to 100 pips and you put your SL to 40 pips. In this way you can still end up earning 40 pips and 100 pips if you get TP.

 

[kasual]

We can set stop loss based on previous support and resistance level. However, any form of strategy has different rules in point out stop loss level. Even some traders choose to use manual cut loss. And does not use stop loss tool. Since they are implement scalping technique and always monitoring the trades.

 

[budado]

We can set stop loss based on previous support and resistance level. However, any form of strategy has different rules in point out stop loss level. Even some traders choose to use manual cut loss. And does not use stop loss tool. Since they are implement scalping technique and always monitoring the trades.

Why use the previous support and resistance level? I totally don't advice this. Its good to use updated support and resistance level and not the previous one. Because if theirs a breakout then chance are you going to get loses. Always trade with updated analysis. I do analysis twice a day. Opening of US and Europe market can chance the result of your analysis.

 

[Decub]

I also don't think so. I think it should depend more on the traders pip target and the analysis he made. Trading or knowledge. The most important thing is for him to understand what he wants and also the rationale behind setting of SL and TP.

 

[budado]

Its really frustrating if theirs a breakout as its really hard to know the exact strong new resistance and support level to help us establish a new trading SL and TP. I always end up having double study each time theirs a breakout to have more accurate SL and TP.

 

[Steve Carlson]

I always open my trade with stop loss and I set my stop loss according to my market analysis. I lost my trading capital many times for avoiding stop loss. Now I am very interested to using stop loss. I also use take profit in my trading. Thus, I prevent my big losses.

 

[avelaskes]

The best place to set the stop loss, according to the classics, it is considered due to the previous maximum or minimum, depending on the current trend.
In my opinion this is true only when the market is in trend, but as always in the Forex market, if the majority of traders see the already established trend, or it is already completed or nearing completion - it is ready to take a break (go into a flat).

 

[budado]

The best place to set the stop loss, according to the classics, it is considered due to the previous maximum or minimum, depending on the current trend.
In my opinion this is true only when the market is in trend, but as always in the Forex market, if the majority of traders see the already established trend, or it is already completed or nearing completion - it is ready to take a break (go into a flat).

What? Its seems you don't have any idea what you are posting do you? I think its best that you start learning even the basic forex trading. Read forex glossary. In this way you will understand what is the proper word in forex trading.

 

[TenkoFX]

Many investors struggle with the task of determining where to set their stop loss levels. Investors don’t want to set their stop loss levels too far away and lose too much money if the stock moves in the wrong direction. On the other hand, investors don’t want to set their stop loss levels too close and lose money by being taken out of their trades too early.

So where should you set your stop losses?

Let’s take a look at the following three methods you can use to determine where to set your stop losses:

• The percentage method
• The support method
• The moving average method