3 Habits To Follow While Using Stop Loss

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3 Habits To Follow While Using Stop Loss Orders
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Index

1. Stop Loss
2. 3 Habits of Setting Stop Losses
3. Dont Let Emotions Be The Reason You Move Your
   Stop
4. Do Trail Your Stop
5. Dont Widen Your Stop

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(No Transcript)
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Stop Loss

• A Stop Loss is determined as an order that you
  send to broker telling them to limit the losses
  on the particular open position or trade.
• As for the take profit, it is an order that you
  send to your broker instructing them to close the
  trade when the certain price reaches the
  specified price level in profit.

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• A lot of traders cut themselves short by placing
  their stop-loss to close to their entry point,
  only because they want to trade the bigger
  position size.
• But here is the trap when you place your stop too
  close because you purpose to trade larger
  position size, you are really invalidating your
  trading edge, as you need to put your stop-loss
  based on the trading signal and the current
  market conditions, not on money you suppose to
  make.

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3 Habits of Setting Stop Losses
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1. Dont Let Emotions Be The Reason You Move Your
Stop

• Like the initial stop loss, your stop adjustments
  should be predetermined before you put your trade
  on.
• Dont let panic get in the way.

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2. Do Trail Your Stop

• Trailing you stop involves moving it in the
  direction of a winning trade.
• This locks in profits and manages the risk if you
  add more units to your open position.

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3. Dont Widen Your Stop

• Increasing the stop increases your risk and the
  amount you will lose.
• If the market hits your planned stop, then your
  trade is made.
• Take the hit and move to the next opportunity.

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• Widening your stop is basically like not having a
  stop at all, and it doesnt make any sense so to
  do it! Never widen your stop!
• Always remember to plan the trade ahead and
  figure out what to do in each scenario so that
  you wont get panic and do something youd
  probably regret later on.