The secret Nr. 1 of placing stop-losses
Statistics show that traders are right more than 50% of the time, but lose more money on losing trades than they win on winning trades, ending up in red. Placing stop losses is one of the building blocks of successful financial trading. Placing stop losses efficiently, however, is an art that comes with practice. A common tip given to new traders is to place stops according to a set percentage (often 2%) or a set amount depending on how much a trader can afford to lose. Bear in mind though that the market cares more about resistance and support levels than what you are willing to lose.Bottom line: Next time you calculate your stop loss level, how about considering incorporating in the risk management what the market is saying.
You are safe now 🙂
The comment in this blog is the personal opinion of the contributors and not InterTrader.com. The content does not constitute financial, investment or tax advice. You are advised to discuss your specific requirements with an independent financial adviser prior to entering into any bet. InterTrader.com is not responsible and disclaims any and all liability for the content of comments written by contributors to the blog, and the content of any third party sites linked from this blog.