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What are the Stop Loss Basics in Forex Trading?

  • July 2014
  • Posted By Ninoslav

Before you place stop loss, your first step should involve analysis of market as not a single trade comes with exact point. This will assure you that SL maintains exact point which is quite suitable for each trade. Stop Loss basics in Forex trading give complete knowledge on different strategies for better trading.

Need to come up with pre-determined profit margin so that you can be sure of placing the stop loss (SL) in exact position and achieve huge amount of profits. Without proper knowledge and experience traders will not be able to have proper speculations on market.

Ways to determine stop loss
Stop Loss basics in Forex trading will give you opportunity to understand effect of market while making use of trend analysis indicator. It is vital to understand market chart and graphs. The trader needs to have knowledge on how to SL and earn huge amount of profits.

There are different ways through which you can possibly determine stop loss point. Technical analysis is an influential way through which best SL can be determined. It is Parabolic SAR where you can make use of 10 pips on top. In case the SL is a distance away from that of the point that you wish to have into market, then it is recommended not to place point there.

Moving averages is also an authentic way of determining stop loss. You need to place point on top or below of moving average just by 10 pips. You can possibly make use of Bollinger Bands which follow the same rule as that of moving average.

Stop loss is known to be a tool in currency trading that allows minimizing risks. Once you know Stop Loss basics in Forex trading, it is also vital to know “What are the Stop Loss Trading Tips for Short Positions?” which is discussed further.


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