Movements of Forex, and using a stop loss
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Thread: Movements of Forex, and using a stop loss

  1. #1
    I dicovered today, I counsel again, putting a stop loss can cause you to loose more money then it might save... and stop loss are usually not guaranteed if the market moves to steeply for all Currency Market companies that I understand.

    What's the market not moving smooth and nice?

    Due to stop losses.

    Every break of the trend is a stop loss which was taken.

    Each barrier is a stop loss.

    I typically never place a stop loss, and it worked fine...

    Recently I put some stop losses and ve been captured everytime, and the market spiked in my way... =-LRB-

    Can I wrong?


  2. #2
    Quote Originally Posted by ;
    For me, the probabilities of being wiped out due to a major astrophe is BY FAR lower than being stopped by the phenomena that are well-known: quit hunting
    If there is a probablity of something occurring, then by definition it will happen 1 day and you'll lose your account.

  3. #3
    It really is a question of probabilities against everything you are able to afford. If it's possible to be totally certain that no terrible events will occur - such as communiions heading down for a daily or two, or you won't get hit by a car crossing a street, precisely when you've got a moderate bet on that's turning sour, well then, you do not need stop losses. Or if you are absolutely infinitely rich already.

    OTOH, the issue is how probable is a movement that is random (i.e. a false alert like a short term stop search ) likely to activate your stop as opposed to a a real shift in fashion. Most individuals don't have systems to analyze this (at least small investor/personal progr ). Everything you could do is make a rough approximation - for example, by putting your stoploss at or out the three std level in a bollinger band, which ought to get hit unintentionally very infrequently, compared to significant changes in fashion - though the BB is a pretty sluggish model Right now for $/Cad, for example, I'm using something similar to placing the Metatrader STD channel at (2*sqrt(2) ~= 2.8) for the stoploss and major TP, also 1/sqrt(2) ( ~= 0.7) for your minor take profit and entry level relative to the trend - with just one week span estimating on the 4 or one hour charts - if you assess yourself (by running the MT STD channel indior around $/CAD) it's been giving very good signals regarding when to get out and in, and also my stop loss has not yet been hit. FWIW, I use it as a guide, not on autopilot...

  4. #4
    I'd say a stop just above break even if long or just below when short is far better than no stop in any way.

    Suppose you're the victim of an accident, temporarily drop sight, are in a coma for weeks or months...

    Who is gonna close your trades when you're outside?

  5. #5
    Usually used SL, but not at a situation where I'm completely confident of the motion. After a while, depending on the circumstance, I'll go 10 to 20 over breakeven.

    And I really agree with a few posts over. We know when there's going to become some unforeseeable incidents that might prevent us from shutting the trade. When it's profitable, it is pure chance. If not, the whole account will return, unless of course that it is a very compact place.

  6. #6
    A stop loss should be there to protect you from dropping an excessive amount of capital. In case you have too much riding on a trade why not simply trade smaller lots? Rather than trading $100,000 (1 lot) currencies only trade $5,000 or not. You will have the ability to ride out a drawdown and gut the loss if you have to take it. Too many people lose an excessive amount of cash by trading too big. They need the BIG BUCKS! Save money and be in the game longer. Many people trade Currency Market for several months, blow off their account (or accounts) because their trading a lot of $$. They then give up and say its too hard or unjust. They attribute everything else except their trading leverage and cash management.

  7. #7
    In loosing side why reduction stop? It's better to be utilised to safeguard our profit and allow the position open and running. And for the side, forget taking profit. ( still attempt to implement it, ) in some market state it is better this way

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