Trading forex or stock market is not an easy task. It requires so much patience and hard work. In the trading world most people say that trading strategy is the key which is not true, Only money management is the key to survive in this market. When it comes to money management the first thing comes first is stop loss. But you need to understand only stop loss can not protect your funds. You need to follow money management rules in order to profit from the market and remember stop loss just a portion of the money management. OK, lets go to the main points on the question of how to place a stop loss order.
how to place a stop loss???
well, at first it depends which trading platform you are using. Most of the forex traders use metatrader 4. So, in this post i will be covering only metatrader setting.
At first you need to click on the plus sign on the top of the mt4 which called new order. After clicking on it you will see some text fields. just like this screenshot—
In the symble tab you need to define the currency to trade. Most of the time it will be auto set so you don not need to worry.After symbol you need to set the volume. What is volume? Volume is another name of lot . Before placing any number in the volume field make sure that you are using standard lot size or mini or micro lot size. Otherwise you can blow your account with just one lot mistake. After placing lot size go to the stoploss field.
What is a stoploss order? A stoploss order is a price level defined by you where if a trade goes against you it will be canceled automatically even you don’t need to connect to the internet. Now , after calculating the distance of your stop loss order find the price level of your stoploss. Just enter the price into the stoploss text field. voila!!you just placed a stop loss order which will protect you and your funds even if you are in sleep.
Why it is so important?
Stop loss order is so important because without it anytime anyones account can be lost.I know a lot of traders who were not serious about placing a stop loss order the ended up losing all of their capital. It is just like a strong protection. You can say that, after hitting my stoploss price goes in my favor. Why this happens? well, it happens to every trader. You need to understand no one know the future price movement. Trading is all about probability game. You can just increase potentiality and nothing else. Think, If you did not placed the stop loss and price just went further oposit direction and further and further what would happen then? you would end up giving up trading because it would blow your account just in an hour. Hiting stop loss is a good thing. Remember every time when a stoploss get hit you should say to yourself ‘i am happy for what happend because if you didnot place it you would be thrown out of the boundary. Next time whenn you place any order do not forget to place a stop loss order. I posted it so deeply because most of my friend always ask me how to place a stop loss order. They even don’t know the importance of it. So, i discussed everything about stop loss how you can place it and how it may protect you. just go to your trading chart and apply everything that you have learned so far and stop searching google how to place a stop loss order.need to learn about candlestick patterns? click here. good luck traders.
happy trading …