A logical method of stop placement
trader
will be wrong sometimes. When a trade does go wrong, there are only two options: to accept the loss and
liquidate
your position, or go down with the ship.
This is why using
stop orders
is so important. Many traders take profits quickly, but hold on to losing trades – it’s simply human nature. We take profits because it feels good and we try to hide from the discomfort of defeat. A properly placed stop order takes care of this problem by acting as insurance against losing too much. In order to work properly, a stop must answer one question: At what price is your opinion wrong?
Hard Stop
ATR % Stop Method
Figure 1
Source: FXTrek Intellichart
Multiple Day High/Low
Figure 2
Source: FXTrek Intellichart
Figure 3
Source: FXTrek Intellichart
Closes Above/Below Price Levels
Figure 4
Source: FXTrek Intellichart
Indicator Stop
Figure 5
Source: FXTrek Intellichart
The Bottom Line
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Spyderco, Inc.
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About Author
simkesrb
Affiliate Marketer, Abundant Thinker, Good Listener,Helping Others from Kragujevac – SERBIA 😉