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Stop loss or stop loss
One of the most controversial points in the Forex market can never overlook their importance should not be overestimated
Firstly
Stop Loss is an exit order that is used to limit the loss a trader may face in a transaction. Let's agree that you can not win from every transaction you make. Loss is normal. Successful risk management means minimizing risk and a stop loss order is an effective solution.
Second
The main reason for using stop loss orders is to meet the logical requirements of a trading strategy where the good plan assumes that you already know the profit / loss rates you are likely to achieve. Of course it is not very accurate because the market always carries many surprises from time to time you may think that you are able to control prices as you will put the order out manually, which keeps the place in mind once the price began to move against you. But the practice shows that going out in such a way is very difficult. You will often imagine that the price will revert to the original trend in a few minutes and thus you will be reluctant to place the exit order
If you decide to use the Stop Loss command, it's important to know where to go
First, for the size of your account, meaning the trader to calculate the size of the loss in the transaction from the total capital and here can be converted to any number of points
Second, for technical analysis, if a trader is in a position to determine the support points and stop loss below
Thirdly, stop loss is used to secure the transaction by reserving some gains meaning that if we are in a buy deal for example and the deal achieved 100 points can move the stop loss to hold 60 points of the gain and secure and waiting for the goal
Disadvantages
First, your deals may be closed repeatedly due to temporary price rebounds. In fact, this is the trader's fault, not the tool itself. Closing trades or activating stop orders frequently means they are placed at the wrong level, you are trading on the wrong currency pair, or you are trading on a wrong time frame
Second, traders need to determine the stop rate, which can be misleading
Advantages
Provides protection against heavy losses
Allows you to better control your account
It helps you monitor counting deals
Allows you to decide how much you are willing to risk