Where to Place a stop Loss in Forex Trading to avoid Heavy Losses?
When you embark on a quest to seek the most valuable asset in Forex, it will take you months at a stretch. And atop the peaks of foreign exchange, you will find the winning factor – a stop loss. Traders seldom realize that becoming a successful FX trader doesn’t involve too many complications. Running after the “perfect” Forex trading strategy, or finding the most profitable currency is not what will reel in the profits. Instead of hunting for trade plans that birth money, start placing stop-losses to save money!
The trick to making money is to save it and keep away losses. Stop orders prove immensely helpful in these grounds. When you place a stop-loss order at $30, whenever a price falls to $30, your position will be withdrawn from the trade, thus preventing any further loss. Merely placing a stop order won’t do the job, you have to know where to place it, to make the most out of a trade and lose the least from it. forex robot
1) Placing Stop Loss During a Buy Order: Placing a stop order too early, or too late, will cause suffocation and not allow you to benefit from market fluctuations. The proper point of keeping it is where there are enough market movements, but none against your favor. Starting off, place a stop order on swing lows. They occur when prices dip and bounce back. This drop and hike have enough strength to throw your trade-off, placing a stop order here will prevent the same from happening!
2) Stop Order Placement During When Selling: Too much fluctuation can lead to significant losses. Forex markets are known for their abrupt nature, and the tendency to topple the best of trades. When you are selling, you will notice swing highs. They occur when market prices rise and then fall, indicating the resistance. In Forex, trends are everything. Your job as an adept trader is to focus on these trends and ride with them.
The right placement of a stop order can either make or break a trade. Surviving the rough tides of Forex is an arduous deal, these mechanisms help lessen the burden by keeping away losses on the worst of trades.