Stop-loss for beginners: how did you learn to set one properly?
A stop-loss is the price at which your trade idea is wrong and the position closes. Setting it well means placing it where that judgement is true, not where your feelings would like it to be.
Share:
- how you chose stops when you started
- the mistake you made most often (too tight, too far, moved it, none at all)
- how you choose stop placement now
The stop-loss placement guide explains the logic, and weekend gaps shows why a stop is not a guarantee.
Background: Weekend gaps: why prices jump when the forex market reopens
Currencies stop trading on Friday evening, but the news doesn't. What happens to your positions and stops when the market reopens at a different price.
What is a weekend gap in forex?
A difference between Friday's closing price and the first price when the market reopens on Sunday, caused by news or events over the weekend.
Will my stop-loss protect me from a gap?
Not fully. A standard stop is triggered when the market reopens and fills at the first available price, which can be beyond the stop. Guaranteed stops, where offered, avoid this for a fee.
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