Is a stop loss always necessary?
It so happens that some Forex traders are reluctant to place a stop-loss order.
There are many reasons for this, but the main one is the awareness that the trade could close at a loss, and the price could move back in the direction of the closed order.
In other words, the price forecast was correct; the correction simply turned out to be slightly larger than the stop-loss value .
Furthermore, calculating the stop-loss value and finding the right placement point is also difficult, as numerous parameters must be taken into account.
Therefore, many traders ask: Is a stop-loss always necessary when trading Forex?
Short-term scalping - namely, pipsovkaIf an order's lifespan is only a few minutes, and the profit per trade is only a few dozen pips, then it's simply physically difficult to set a stop-loss when opening each new position.
Hedging or locking If hedging is used in trading, you can also avoid setting a stop order. In this case, the loss on the first trade will be offset by the profit on the second.
In this case, pending orders in the opposite direction, located at the edge of the risk zone, can be used as an alternative. This means that as soon as the first trade starts to incur losses, a second one will open, but in the opposite direction.
Trading without leverage is when you use only your own money for trading, with the volume of opened positions equal to the amount of your deposit.
Therefore, it is better to set a stop order. But even if you don't set one, losses are unlikely to be as critical as with margin trading.
Furthermore, a stop loss is not necessary if, after entering the break-even zone, you change it to a trailing stop , thereby also protecting your trade from unfavorable trend reversals.
Read also:
Automatic stop loss and take profit script - http://time-forex.com/skripty/automatic-stop
Automatic stop loss moving script - http://time-forex.com/skripty/stop-loss-move
