Is it necessary to set a stop loss for forex trading?

Setting a stop loss in forex trading is a trick that can only be used by masters! What do you rely on to do foreign exchange? Don't know what to do with technical analysis? If you understand technical analysis and know the buying point, you should know the selling point!

WikiFX tells you why setting a stop loss is necessary. A stop-loss order is designed to mitigate an investor's loss on a ** position。Although most traders associate a stop-loss order with a long position, it can also be applied to a short position.

Stop-loss orders eliminate emotions that affect trading decisions. This is especially handy when one is unable to observe**. Forex stop-losses are crucial for a number of reasons.

However, a simple reason that stands out is that no one can be sure of the future of the forex market. No matter how strong the setup is, and no matter how much information is likely to point to a particular trend.

The future is unknown to the market, and every transaction is a risk. A forex trader may win more than half of most common currency pairs, but their money management may be so poor that they still lose money. Improper management of funds can lead to unpleasant consequences.

To prevent this, one should know how to calculate stop loss in Forex.

It's easy to see that using a stop loss can help market participants manage their trading psychology. With a stop loss, traders can eliminate the fear of the unknown and manage unnecessary risk on any given position. What's more, a simple stop-loss setting can help traders control their fear and anxiety when placing orders.

This ability to keep a cool head in the face of pressure is necessary if one wants to achieve long-term success in the market.

Most traders have heard such a sentence: the one who can buy is the apprentice, the one who can sell is the master, and the one who can stop the loss is the grandfather.

Some friends who have made investments will point out that 80% or even more than 90% of large losses are caused by not stopping losses, so it is very important, and it can be said to be one of the indispensable factors in the trading system.

1.Take-profit and stop-loss routine: Set outside the support and resistance lines

One of the things we can observe in a trend is that sometimes it seems impossible to break through a certain level. More often than not, when these areas of support or resistance are retested, it may prevent the market from breaking out again.

It makes sense to set your stop loss outside of these support and resistance levels, because if the market is trading outside of these zones, then it stands to reason that a break in that area will bring more traders to make breakout trades and push your position further against you.

2.Don't set your stop loss too narrowly

When setting a stop loss, take into account the volatility of the currency pair, as well as the possibility of hovering around the entry point for some time.

3.Do not set your stop loss at exactly the support or resistance line

You can't set your stop loss too narrow or too wide, but you can't set it right at the support or resistance line. If you want to go long, you can find a nearby support level below the entry and then set a stop loss in that area. If you're going short, you can look for a nearby resistance level above the entry and set a stop loss in that area.

It is very necessary to set a stop loss in forex trading, otherwise you will lose your money.

Stop loss is to use system tools to control losses within an acceptable range, such as the current euro and dollar we take long orders. It can be set when trading**if not as I expected**. Instead, if it falls to , close the position.

After this instruction is entered, when ** really falls to the system to automatically close the position, this is the stop loss.

In the real forex trading trade, select the currency pair you want to set and click the option with stop loss.

Stop loss is the security guarantee set by yourself when trading, controlling the range of possible losses, and protecting capital (life).

The stop loss is set at the opposite price of the expected direction, and it will be executed when it is lost, which has the effect of a car seat belt.

Not all stop-losses are reasonable, and may simply be swept out; But it may also be a lifesaver for all the principal, and the capital is preserved at a critical time.

Therefore, stop loss is an indispensable risk control tool, please make reasonable use of it.

This is set according to your judgment of the market, if you judge them to go up, in order to avoid misjudgment, you can set a stop loss below. In fact, doing foreign exchange is a probabilistic event, that is, how much profit you are prepared to use with small losses, but personal advice does not have a 200% rate of return, then the set stop loss is meaningless, and the correct stop loss is the top priority in foreign exchange.

This is to look at the actual situation, to rely on their own analysis of the key points of wealth for stop loss, if you want to go away can not look at the market, you can take profit, if you can top the plate is not recommended to take profit. If you want to do foreign exchange, you can learn about the "third wave" I have been doing it for 3 years, and I feel that all aspects are good, and I hope to help you by introducing it to you.

This is everyone's trading method, if it is a medium and long-term transaction, then the stop loss and take profit space will definitely be very large, if it is intraday **, then there must be a stop loss of about 50 points, the minute chart is ultra-short, relatively small. The above information comes from Baxter Investments.

This depends on how you judge and analyze, when you analyze the trend, you can set the support and resistance to stop loss, take profit, and there is a winner cheat in the third wave, you can learn from it.

Stop loss is generally in, take profit is in.

Forex Trading Basics Lesson 10 How to set your stop loss correctly.

If you're trading with a computer, it's pretty straightforward. After an order is filled, pull the transaction line up and down, one is a take profit and the other is a stop loss, or you can change it manually. If it is operated by mobile phone, click Modify Order and there are two spaces below it.

The first one is the stop loss, and the second one is the take profit.

According to the most recent days, when the stock price reaches a certain range from the most **** to sell, if the investor is in a state of loss at this time, it is called stop loss; If you are in a profitable state, it is called a stop profit. This method is used in most cases to take profits. When the amplitude reaches the take-profit, it depends on the activity of the stock price, and the more active ** should set the amplitude larger.

Set *** according to the support level of the technical indicator, such as the 10-day, 30-day or 125-day moving flat ** as ***; When the MACD first appears a green bar; Or set according to the key positions of historical significance, such as: the position of major policies in history.

Reference objects can also be set according to the ** pattern, mainly including: the tangent of the trend line; the neckline position of the head shape such as the head and shoulders crown or the arc top; the lower band of the ascending channel; the edge of the notch, and so on.

In practice, you can also set the take-profit level according to the integer price of the stock price, such as: 10 yuan; $20. There is not much scientific basis for this method, mainly because the integer level has a certain support and resistance effect on the psychology of the investing public.

Some people will also set take profit levels based on areas with high trading intensity, such as the peak area of the distribution of moving costs. Because the trading area will have a direct support and resistance effect on the stock price.

When a solid bottom is broken down, it often transforms from a strong support zone into a strong resistance zone.

Sometimes you can also set the psychological price according to your own experience to make a profit, ***. When investors pay attention to a certain stock for a long time and have a deep understanding of the stock nature, the take profit and *** set according to the psychological price are often very effective.

Stop-loss means that when the loss of your trading order reaches a predetermined amount, the order will be closed out in time to avoid forming a larger loss.

If it is a preset, it can be divided into two situations, one is a profit, and the other is a loss.

Profit***: It means that your order has made a profit, for example, you are making a short cover order for GBP/USD, and the take profit price is set at. By the time the pair falls, you have already made a profit of 100 pips.

At this time, you are worried that the exchange rate may be ** to or above your entry price, and you will take back the existing profits, but you don't want to close the position immediately, so you are setting a stop loss price. In this way, even if the exchange rate is **, you can make a profit of 50 points if you knock out the stop loss.

Loss***: Similarly, you are making a short order on GBPUSD, the take profit price is set at, and *** is set at, so that when the exchange rate ** knocks off your stop loss, your single will lose 50 points.

Setting Stop Loss and Take Profit in trading is very skillful and necessary. Setting a reasonable stop loss can minimize your losses and even make a profit, so that the opportunity to make a profit in the transaction is greater.

The forex market is volatile, and with it comes risk. One way to avoid risk is to set ***. But how to set up *** when speculating on foreign exchange, and how many points is more appropriate?

Controlling risk is not simply a matter of setting a stop loss of several pips. Some people have also asked how many points to set a stop loss is more reasonable, in fact, the stop loss is not a question of how many points to set, but a problem of improper control and unreasonableness. I believe you have also encountered such a situation, like others** a certain currency, others set a 30-point stop loss and were not knocked out, and you set a 50-point stop loss but were knocked off.

This is the key, because you did not judge the strength range of the **, it can also be said that you did not grasp the timing of the entry, you are buying in the upper stage of the ****, and others are entering the market in the middle and lower section of the **, so of course the safety factor of others is greater than yours. Therefore, the stop loss of foreign exchange speculation is not about how many points, that is, there is no difference between the size of this risk, only the difference between us and unreasonable. Perhaps, some people think that as long as the loss is controlled within the limits of what they can afford.

I don't disagree with that, but if there's a way to keep the damage to a minimum, why not? In short, the number of stop-loss points for speculating on foreign exchange cannot be generalized to control the amount, because every transaction is different, and any judgment should be based on the analysis of the current market. Reasonable risk control and accurate entry timing are all good strategies to reduce losses.

I usually place an order only when the profit and loss ratio is 3 to 1. Set a stop loss of 30 points, take profit is 90 points, if the trend is particularly strong, set a moving stop loss to expand the profit.

The line below the number of hands, the stop loss price is literal, and the profit price is the take profit, for example, if you are long and want to take profit at 20 points, you can use the price of your ** plus 20, 20 points of stop loss, minus 20, such as short, if you want to stop loss +20, if you want to take profit -20