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Stop-Loss Techniques.


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  • 4 weeks later...

Simple Stop Loss Strategies & Techniques

 

Simple Stop Loss Strategies can be easily used with Japanese Candlestick trading.

 

One of the most often-asked questions we receive at the Candlestick Trading Forum is how to use candlestick analysis as part of a simple stop loss strategy.

 

The fact is, not only is candlestick analysis ideal for pinpointing the exact time the successful trader or investor should enter the trade, but it is equally valuable in stop loss strategies. The proper use of candlestick analysis provides a simple, visual representation of the exact point in time when the reason for buying or shorting no longer exists.

 

Once you deeply, truly understand candlestick trading tactics, you will soon come to the realization that most of trading is just plain common sense. But, as I believe Mark Twain said, “Common sense is not that common”.

 

It amazes me each and every day to see all these “brilliant” stock annotators and stock analysts attempt to explain what happened in the market that day. As if the market cared one bit about their stock market fundamental and technical analysis. But I guess these guys and gals are just trying to do their job, feeding the all-too-human need of “Having to Know Why Something Happened”.

 

Candlestick Traders don’t need to know “why something happened”. They just look at the candlestick chart patterns and know “something happened”. In a strong reversal pattern, “something happened’ to totally change the HUMAN EMOTIONS of the HUMAN BEINGS buying or selling that stock or commodity. After all, the candlestick patterns are simply the visual representation of human psychology – of Greed and Fear.

 

So, when using simple stop loss strategies in their overall stock trading system, the Candlestick Trader does not need to know WHY the stock is now going down after they bought it. The fact is, it IS going down. The psychology has changed.

 

Simple Stop Loss Strategies Involve Knowing The General Market Direction. The investment psychology of the market, in general, can be easily seen in the Japanese Candlestick signals. Use that stock market information to change the makeup of your portfolio. During “iffy” periods, having long and short positions will provide better probabilities to make profits, even when the direction of the market is not clear.

 

Stop Loss Strategies and Techniques using the candlestick method

 

Protecting your assets - that is the main objective for putting on stop losses. The stop loss objective is to provide a point where the reason for buying or shorting becomes null and void. Many stock market strategies incorporate stop loss objectives into their trading formulas for closing a trade gone sour. Usually this is done by establishing a percentage loss as the parameter. Here is the first myth to be bashed: The candlestick method completely disregards a preset formula for stopping out.

 

One of the major investing mistakes is using a prescribed percentage as the stop loss. Your purchase price becomes an important function of where you are to stop out. The stock market investing advice given by some investment advisors recommends three percent as the stop-out level. Others suggest eight percent. But where you buy a trade position now becomes the quantitative element of where you should place your stop.

 

The most important factor for establishing a stop loss is very basic. What price point would indicate the established trend has been negated? This now becomes a stop loss level established based upon the trend being stalled and/or negated.

 

As with all of candlestick analysis, this becomes a ?common sense? evaluation. If you have put on a long position based upon a bullish buy signal, where would the price have to back off to confirm that the sellers were still in control?

 

A signal has significant meaning. Knowing that, the thought process for when to stop out of a trade becomes easy. A buy signal indicates a new trend. What would counter that ?indication??

 

Probabilities mean being in that trade has favorable odds for profitability, not any guarantees. Even though a majority of trades will work using the signals, some trades won?t work. Keeping that mindset in focus as well as other candlestick basics, stop loss analysis creates a format for identifying when a trade is not working and getting out of the trade as soon as possible.

 

Establishing the stop loss point involves using the same common sense approach incorporated throughout the candlestick method and other stock investing concepts.

 

Studying stock chart patterns will vastly improve your ability to recognize when and where a stop loss should be placed on a trade. Study candlestick chart formations with extensive downtrends. Often a fizzled buy signal can be found. Recognize what the trading candles did after the buy signal and what selling candles negated the buy signal.

 

Keep in mind that all trades do not work. Learn to move out of those trades and move to other trades immediately.

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  • 5 months later...
  • 9 months later...

Yes, I do use stop loss cause it helps me put stop loss. I have to use it if I don't want to lose all of my money. I certainly do not want to lose all of my money at one time. I usually use like a 20-30 pips stop loss. Its wise to do so and we can prevent a lot of losses that way. We can prevent all of money from draining to zero. This is also crucial if the market is too volatile and that you need to get away from the screen too. Now, some people wipe out their entire account without using it so make sure you use it. 

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  • 4 weeks later...
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Stop loss is quite a good technique when it comes to Forex and in a bid to safeguard our losses and make profit out of it. In other to overcome this, there is need for practice. I mean, it will be pretty difficult for a trader to get it right with setting SL when he rarely tries it over and again. When I was still new, I used to have mine hit over and again before I finally got it right.

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Stop loss is quite a good technique when it comes to Forex and in a bid to safeguard our losses and make profit out of it. In other to overcome this, there is need for practice. I mean, it will be pretty difficult for a trader to get it right with setting SL when he rarely tries it over and again. When I was still new, I used to have mine hit over and again before I finally got it right.

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  • 8 months later...

What? Do you want to reduce stop and loss technique? i bet you are the one who don't have anything to do in your live, Stop loss technique is a technique that is using stop loss to limit loss, this feature is useful because even you close the platform it still works for you and will limit your loss, reducing of this feature does not give us much profitability but increasing risk.

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  • 3 years later...

@decub A pretty good technique to be exact, it helps traders around the world a lot and become one of the most prominent feature in many foreign exchange trading platform. My favourite feature to reduce to the risk to as low as possible and make me able to gain better profit with less loss.

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@decub A pretty good technique to be exact, it helps traders around the world a lot and become one of the most prominent feature in many foreign exchange trading platform. My favourite feature to reduce to the risk to as low as possible and make me able to gain better profit with less loss.

Same here but sometimes i feel like that this feature if you use it at the wrong time will be an invisible obstacle for you to get further profit, this is why you need to use it carefully.  SL technique without doubt help us a lot, from manage the risk to manage our own emotions since manual trading doesn't happened here.

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  • 3 weeks later...

Same here but sometimes i feel like that this feature if you use it at the wrong time will be an invisible obstacle for you to get further profit, this is why you need to use it carefully.  SL technique without doubt help us a lot, from manage the risk to manage our own emotions since manual trading doesn't happened here.

Stop loss still a good tool but the technique is pretty simple, just set SL amount and done. Actually not really technique at all. And, yes when we use carefully and wisely stop loss will be one of the best feature we will have, our trading will become better since we can reduce the risk more.

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  • 2 years later...
  • 4 weeks later...

Hi,

Setting a stop-loss order is one of the most important and mandatory actions when trading on Forex. The conditions of placing a stop order must be spelled out in the algorithm of each professional strategy. Otherwise, this strategy cannot be considered complete. However, some beginners who have just come to Forex, do not fully understand what stop-loss is and why it should be exposed. so every new traders first need to know about stop loses then starting trading.

 

Thank you..

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On 4/22/2020 at 7:48 PM, Lin5878 said:

Hi,

Setting a stop-loss order is one of the most important and mandatory actions when trading on Forex. The conditions of placing a stop order must be spelled out in the algorithm of each professional strategy. Otherwise, this strategy cannot be considered complete. However, some beginners who have just come to Forex, do not fully understand what stop-loss is and why it should be exposed. so every new traders first need to know about stop loses then starting trading.

 

Thank you..

Stop loss feature helps cut off our losses earlier before it wipe out all of your entire account.

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