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The importance of stop loss and methods

About the importance of stop forexbonusrebate, professionals often use the crocodile law to expla cashback forex the original meaning of the crocodile law forex discount brokers: suppose a crocodile bites your foot, if you try to break free with your h forexrebatesbrokerss, the crocodile will bite your feet and hands at the same time you struggle more dangerous so, in case the crocodile bites your feet, your only choice is to sacrifice a foot in the currency market, the crocodile law is: when you find yourself trading away from the direction of the market, you must immediately stop loss, without any delay, without any luck crocodile eating people sounds too cruel, but the currency market is actually a cruel place When you find yourself trading away from the direction of the market, you must stop immediately, without any delay, without any fluke crocodile eating people sounds too cruel, but the foreign exchange market is actually a cruel place, every day people are swallowed by it or eclipsed We can look at a set of simple figures: when your money is lost from 100,000 to 90,000, the loss rate is 1 & divide; 10 = 10%, you want to recover from 90,000 The win rate you need to recover from 90,000 to 100,000 is also just 1÷9=11.1% If you lose from 100,000 to 75,000, the loss rate is 25%, the win rate you need to recover will be 33.3% If you lose from 100,000 to 50,000, the loss rate is 50%, the win rate you need to recover will be 100% In the market, it is not difficult to find a currency pair that is down 50%, and In the market, it is not difficult to find a currency pair that is down 50%, but to ride and sit on a dark horse that is up 100%, Im afraid you have to rely on luck. As the saying goes, "If you have a green hill, you are not afraid of no firewood. You should think of your position as an employee you hire who must serve you and create wealth, which is his only task of course, you need a period of time to examine him, which is equivalent to the time we hold the position and psychologically allow price fluctuations if a period of time has passed, he did not do anything for you, you must fire him, although you need to pay a small price for this if he not only did not If he is not only not doing anything, but is also causing disruption and harm, then you should fire him faster and more firmly, and then you start hiring again. It is difficult for institutions to buy and sell foreign exchange quickly, but buying and selling foreign exchange quickly is essential for them to implement the stop-loss guidelines, so this is a great advantage over institutional investors as individual investors, so take advantage of it. Once you have made money and made profits, you can give a little more than the 7% or 8% limit for normal exchange rate fluctuations It is important not to sell foreign exchange that has fallen 7% or 8% from the highest point of the exchange rate to distinguish between the two. A little bit of forexdiscountbrokersace, but also will not be because of the normal 10% to 15% price fluctuations and fear of the key is to be precise when the breakthrough point to purchase foreign exchange, so that the possibility of 8% drop in the exchange rate is minimized Stop loss is an important means of protecting yourself in foreign exchange trading, like a brake device in the car, encounter unexpected situations good at braking, in order to ensure the safety of the ultimate purpose of the stop loss is to preserve the strength, improve capital utilization and efficiency, to avoid small mistakes into big mistakes, or even lead to total destruction stop loss can not avoid the risk, but can avoid being a greater risk of accidents how to set the stop loss level? There are the following methods for reference: 1. Maximum loss method This is the simplest stop-loss method, when the buy foreign exchange floating loss margin reaches a certain percentage point to stop loss 2. More often used in the case of stop loss 3. balance point stop loss method in the establishment of the original position that is set up after the original stop loss level, can be set at a distance of 5% to 8% from the opening price of the position to buy after the exchange rate rose, it will be displaced to the stop loss to the opening price, which is your break-even position, that is, the balance point stop loss level.  4. technical stop-loss method in the key technical positions set stop-loss single, can avoid the further expansion of losses technical stop-loss method does not have a fixed pattern in general, the use of technical stop-loss method, is nothing more than a small loss to bet on a big win its main indicators are: important average is broken; trend line tangent is broken; head and shoulders, double top or arc top light head pattern neckline level is broken; rising channel of the lower rail is broken; gap of For example, after buying in the lower rail of the rising channel, wait for the end of the uptrend and then close the position, and set the stop-loss level near the important moving line again, for example, after the market enters the consolidation phase, there is usually a convergence triangle pattern, the price and the medium-term average (generally 10 to 20 days) of the deviation rate gradually reduced once the price of the medium-term average of the deviation rate re-enlarged, it means that the plate has ended at this time If the price turns into a downtrend, it should be decisive to leave the field 5. time stop-loss method People generally pay attention to the space of the stop-loss, without taking into account the time factor as long as the price falls to a certain price set in advance, the position will be cut out, which is the space stop-loss space stop-loss method has the advantage of sacrificing time and waiting for the big market, the disadvantage is that after a long wait often have to stop loss, both delayed time and loss of Money for this reason, the need to introduce the concept of time stop loss time stop loss is based on the trading cycle and the design of the stop-loss technique, for example, if we are expected to a currency pair trading cycle of 5 days, buy and then buy price a line wandering more than 5 days, then the next day should be resolutely out of the position from the space stop loss view price may not have reached the stop-loss position, but hold foreign exchange time has crossed the boundary of time, in order not to expand the time Loss, at this time may wish to get out of the following stop-loss method for reference only: 1, 3% below the cost price set a stop-loss point, after the fall should stop loss out of the exchange rate running trend may be judged wrong, out of the Bureau, re-enter after Zheng Ming trend can also be set 5% as a stop-loss point, the maximum should not exceed 10%, because the magnitude is too large to play a stop-loss role 2, the 5-day moving average at high levels under the 10-day moving Average, the formation of a death cross, as a stop-loss point to moving averages as a stop-loss point is often used in technical analysis of a method, practice has proved that this method is very effective, but also easy to grasp 3, the rising trend line as a stop-loss point, the exchange rate rises often form a rising channel, when the exchange rate fell below the rising trend line on the lower edge of the rising channel, as a stop-loss point, indicating that the rising trend may change  4, when the exchange rate breaks through an important pressure line, but failed to stand firm and break this one again, as a stop-loss point, so the breakthrough may be unsuccessful or a false breakthrough 5, unilateral rising market, SAR indicator gives a sell signal as a stop loss, SAR indicators for strong markets and strong currency pairs stop-loss function is very high accuracy, but also very effective 6, when the K-line chart clearly appear M When the head and head and shoulders pattern, should be resolutely stop loss, so when such patterns appear, often indicates the beginning of the downturn 7, when the currency price in a box between the movement, once the bottom of the box is limping, should stop loss out of the game so that such situations arise, often the exchange rate will enter the next box between the operation, in just broken, sell will reduce losses This is some very common stop-loss settings investors if you can effectively master, can avoid Huge losses, save valuable capital, ready for the next time to come
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