Types of Stop Loss
Money Stop
Definition: A trader sets a fixed amount they are willing to lose on a trade, for example, £20.
Issue: This approach often leads to larger losses because it doesn’t align with market movements.
Advice: Avoid using the money stop.
Time Stop
Definition: Used mainly by scalpers, this involves closing a trade if it doesn't move in the expected direction within a set time frame (e.g., 4-8 bars).
Key Point: It requires discipline to adhere to the set time limit.
Advice: Suitable for scalpers.
Technical Stop Loss
Definition: Based on price movements and market structure, this is the most effective stop loss for technical traders.
Types:
Initial Stop Loss: Set at the entry of a new position, usually at a momentum high or low. The trade remains valid as long as the price doesn't reach this point.
Technical Trailing Stop: Used to protect gains on a winning trade. As the price moves in your favor, adjust the stop to a new structure point that, if reached, invalidates the trade.
Money Stop
Definition: A trader sets a fixed amount they are willing to lose on a trade, for example, £20.
Issue: This approach often leads to larger losses because it doesn’t align with market movements.
Advice: Avoid using the money stop.
Time Stop
Definition: Used mainly by scalpers, this involves closing a trade if it doesn't move in the expected direction within a set time frame (e.g., 4-8 bars).
Key Point: It requires discipline to adhere to the set time limit.
Advice: Suitable for scalpers.
Technical Stop Loss
Definition: Based on price movements and market structure, this is the most effective stop loss for technical traders.
Types:
Initial Stop Loss: Set at the entry of a new position, usually at a momentum high or low. The trade remains valid as long as the price doesn't reach this point.
Technical Trailing Stop: Used to protect gains on a winning trade. As the price moves in your favor, adjust the stop to a new structure point that, if reached, invalidates the trade.
Penafian
Maklumat dan penerbitan adalah tidak dimaksudkan untuk menjadi, dan tidak membentuk, nasihat untuk kewangan, pelaburan, perdagangan dan jenis-jenis lain atau cadangan yang dibekalkan atau disahkan oleh TradingView. Baca dengan lebih lanjut di Terma Penggunaan.
Penafian
Maklumat dan penerbitan adalah tidak dimaksudkan untuk menjadi, dan tidak membentuk, nasihat untuk kewangan, pelaburan, perdagangan dan jenis-jenis lain atau cadangan yang dibekalkan atau disahkan oleh TradingView. Baca dengan lebih lanjut di Terma Penggunaan.