Reasons for setting stop loss

Despite all the convictions, many of the newcomers to Forex stubbornly continue to ignore placing a stop loss order, not seeing any compelling reason to use it.

Those who assure that they will close the deal on their own in case of danger, others are confident in the correctly drawn up forecast and do not believe that the price will reverse.

In fact, setting a stop is necessary for several reasons that beginners do not always realize:

• Deposit protection - or a pre-planned amount of losses, the most obvious reason, allows you not to lose your deposit due to a rapid candle against the position.

• Hands-free – you get the opportunity to step away from the monitor and not constantly monitor your transaction, but only check the situation from time to time.

• Psychological aspect - the market does not put so much pressure on you; when you set a stop loss, you have already internally accepted the planned losses and are not so worried about the transaction.

• Protection from gambling - when the trend goes against you, you always want to wait until the price returns to its previous rate, as a result the loss goes beyond reasonable limits.

• Realize your mistakes - often after the price has triggered the stop loss, it goes back in the same direction, but this only indicates that your market analysis is wrong and you have incorrectly calculated the size of the correction.

Thanks to a stop order, you begin to learn to analyze the market, and its installation allows you to save your deposit for the next, more successful transactions.

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