Always Use a Stop Loss

[Tobi]

A stop loss is a predetermined amount of risk that a trader is willing to accept with each trade. The stop loss can be either a dollar amount or percentage, but either way it limits the trader's exposure during a trade. Using a stop loss can take some of the emotion out of trading, since we know that we will only lose X amount on any given trade. Ignoring a stop loss, even if it leads to a winning trade, is bad practice. Exiting with a stop loss, and thereby having a losing trade, is still good trading if it falls within the trading plan's rules. While the preference is to exit all trades with a profit, it is not realistic. Using a protective loss helps ensure that our losses and our risk are limited.

 

[gwolf666]

I totally agree, a stop loss is like a safety belt for your capital . It protects us from large losses and helps us stay calm during trading. Even if we sometimes have losing trades, sticking to the plan and respecting the stop loss is key to surviving and growing in the market. Ultimately, limiting risk is more important than chasing quick, uncertain profits.

 

[Fidelia]

I haves been hearing about "Stop Loss" in forex. And I learned that it is a safety net that helps to minimize the loss in a particular forex trade.