Stop loss as the name suggests, stops losses while trading. Using a stop loss is simply an automated way of ensuring that you exit the trade as planned. The main advantage of a stop loss is knowing that you have an order ready to cut your losses without having to monitor the price movement all day. This is beneficial for all traders, whether new or seasoned.
The Importance of stop loss in forex trading.
- Thread starter somrat4030
- Start date
Jaculation
Member
Traders use stop losses to automatically close trades in order to prevent losses brought on by the market's volatility. Your trade will automatically close and stop further losses if you reach the loss threshold. Every forex trader must use this tool. It lets you know when your analysis is correct and incorrect and thus prevents you from blowing your account.
Polakandil
Well-known member
There are traders who dare to trade without stop loss and accept the end consequence when the market is against all positions with margin call account, but there are traders who learn how to put a stop loss-based risk management plan on their trading strategy.
BinarySumo
Active member
Stop loss is an important risk management tool used in trading. It allows traders to set a maximum level of potential loss for a trade, after which the trade will be automatically closed. This helps traders to limit their potential losses and protect their capital.
Polakandil
Well-known member
In the certain trading strategy indeed not use stop loss like as basket trading strategy relying from correlation between pairs, however when focus on one pair usually using stoploss and trying to put tight stop loss using pending order.
