Stop loss (stop loss) installation and parameters.

No aspect of Forex trading causes as much controversy and disagreement as placing a stop loss order, but almost all traders agree on one thing - it must be placed unambiguously.

Stop loss (stop loss) is a pending order to automatically close a position as soon as the price reaches the set trigger parameters. Designed to reduce losses and prevent complete loss of funds in the trader's account.

Forex trading is a rather risky business; price movements do not always meet the trader’s expectations, and if you do not close your position on time, you can completely lose your deposit. There are many points that prevent manual closing of an order; it is in such situations that Stop loss helps out.

The basics of setting stop losses.

• Minimum size – in most trading terminals the minimum size of this stop order is 10-15 points.

Therefore, even with a strong desire, you will not be able to set it at a closer distance to the current price. A way out of this situation may be to trade on accounts with five-digit quotes, since in this case 15 points will be only 1.5 of the standard value. • Risk management – ​​risk management in Forex provides for a maximum loss per transaction of no more than 2-5 percent.

That is, if you have only $100 in your account, losses when your stop loss is triggered should not exceed $5. Based on this rule, you will also have to choose transaction volumes. For example, for the same 100 dollars it is not advisable to open positions of more than 0.05 lots. • Ratio – as a rule, the stop loss is set 1.5 times less than the take profit .

• When to place - definitely immediately when opening a new order, since at any second an unforeseen situation can occur from critical consequences of which only the activation of Stop loss can save you.

Correct stop loss in Forex.

There are several options for placing this order, and each of the authors of the idea believes that his stop loss is the most correct.

In this case, you should take into account all the recommendations given above. 1. Based on the minimums and maximums of the price - before installation, the minimums or maximums are analyzed (depending on the direction of the transaction) and the stop order is placed a little further in anticipation of a trend reversal. For example, there is an upward trend in the market, since the beginning of the session the price has dropped to 1.2545, the current currency quote is 1.2575, which means we set the stop loss at 1.2540.

2. On support and resistance lines – the parameter is set below (above) the border opposite to the trend direction.

For example, in an uptrend, below the support line, and in a downtrend, below the resistance line. Before you start trading, you need to build a price channel. 3. On pullbacks – very often Forex rollbacks against the main trend on the working time frame also serve as the basis for calculations.

If in your time period the maximum price correction was 20 points, set the stop loss at 30, using a coefficient of 1.5. 4. Forex volatility is also one of the options in which the volatility of a currency pair is taken as the basis for calculations; if on average per session it is 100 points, then the size of the stop loss should be set taking into account this indicator and all the same minimums ( maximums) prices.
Determine for yourself which option suits your strategy best, and if you need more information on this topic, you can find it in the article “ How to set a stop loss ”.