Let’s face it. The market will always do what it wants to do, and move the way it wants to move. Every day is a new challenge, and almost anything from global politics, major economic events, central bank rumors and China FUD can turn currency prices one way or another faster than you can snap your fingers.
This means that each and every one of us will eventually take a position on the wrong side of a market move. Being in a losing position is inevitable, but we can control what we do when we’re caught in this situation. If you want to protect yourself from risk, you need to set a STOP LOSS order.
Taking a 5% loss would be preferred to losing 50% of your stack.
Stop Loss orders are a great way to mitigate risk and this is why they can be so useful.
Conditional Orders are triggered only when the price reaches the value you defined. Your order is only added to the order book once the price reaches the value that you set. These types of orders cannot be detected as support/resistance by bots and other traders watching the book, therefore giving you a slight edge.
For STOP LOSS orders, use the condition "less than or equal to" and choose the minimum price you are comfortable with selling at.
Setting a STOP LOSS order is easy. Simply enter the value you want to sell it at - I recommend 5% or more below purchase value - then copy and paste that same amount into the field below.
To TAKE PROFIT, use the condition "greater than or equal to" in order to sell your coin after the price reaches a certain value.
The saying, “Live to trade another day!” should be the motto of every trader because the longer you can survive, the more you can learn, gain experience, and increase your chances of success. To me, the measure of a successful trader is not how much they gain, but how much they don't lose.
This makes the trade management technique of “stop losses” a crucial skill and tool in a trader’s toolbox.
Having a predetermined point of exiting a losing trade not only provides the benefit of cutting losses so that you may move on to new opportunities, but it also eliminates the stress and anxiety caused by being in a losing trade without a plan.
A sensible way to determine stops would be to base it on what the charts are saying. Let’s take a quick look at a way to set your stops based on support and resistance:
In this case, it makes the most sense to set your stops below the trend lines and support zones. If the market moves into these areas, that means the trend lines drew no support from buyers and now sellers are in control.
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