Stop losses. A necessary evil?

I agree, indeed if we trade without using stop loss it's like we are fighting without using weapons. Enemies can attack at any time and we have no weapons to kill enemies.

Risk management, especially stop loss, is very important because we know that the forex market moves erratically and that none of the analysis is one hundred percent accurate, so stop loss is vital.

I use mixed techniques so sometimes I do scalping and sometimes long term trading so I don't always use stop loss on every transaction I make. But I often use stop loss while there is an opportunity because risk control needs to take precedence.

Hi all,

We are all told that trading without a stop loss is like driving without a seatbelt .... But is that true? Do you keep a journal of your trades and if so how many times have you correctly predicted the movement of an instrument but lost out because your stop was hit before the price moved in the direction you initially thought?

I'm not suggesting that you abandon common sense and forego good money management, I'm merely asking if it should be the 'go to' tool that we use it as.

I suggested somewhere else that there were other options but my views were attacked as heresy. My alternative was to split an order up into parts in an attempt to avoid an outright loss ... For example, assuming that after your analysis you place a buy on an instrument of .10 units at x price and your stop loss is 20 pips below that ... wouldn't it be practical to put say 0.05 units on at your price and another 0.05 units at  the position where you would have placed your stop loss and then an actual stop loss further away allowing you more room for error.

I'm not saying that this is the only answer and would love to hear about any other tactics you might employ.

Hi all,

We are all told that trading without a stop loss is like driving without a seatbelt .... But is that true? Do you keep a journal of your trades and if so how many times have you correctly predicted the movement of an instrument but lost out because your stop was hit before the price moved in the direction you initially thought?

I'm not suggesting that you abandon common sense and forego good money management, I'm merely asking if it should be the 'go to' tool that we use it as.

I suggested somewhere else that there were other options but my views were attacked as heresy. My alternative was to split an order up into parts in an attempt to avoid an outright loss ... For example, assuming that after your analysis you place a buy on an instrument of .10 units at x price and your stop loss is 20 pips below that ... wouldn't it be practical to put say 0.05 units on at your price and another 0.05 units at  the position where you would have placed your stop loss and then an actual stop loss further away allowing you more room for error.

I'm not saying that this is the only answer and would love to hear about any other tactics you might employ.

The use of stop loss is indeed a good choice to minimize risk but actually there are still other ways to minimize risk by using cut loss, only to be able to use cut loss we must have a much better psychology compared to the psychology of traders in general. Cut loss is a strategy that requires controlled psychology and good mentality.

That's right, trading always using stop loss or cut loss will help us maintain the stability of our psychological condition. we will be able to stay calm in trading with any conditions, even if it is floating minus or even a loss. because from the beginning we already know and we have fixed our maximum losses, therefore we use stop loss or cut loss. And comfortable trading conditions with stable psychology are the key to success in trading