Tue Mar 08, 2016 11:36 pm
Do you know how to set Stop Loss orders?
Every investor on stock market loses his money. The key to success is to win more than lost, and the only thing you can do in this case is choosing the right levels of Stop Loss (SL). Understanding of where to set the SL order is important even before opening the position - because of the possibility of adjusting the size of opening positions to the SL.
So without any problem you will be able to determine the capital percentage risk in every transaction. All theory is that the Stop Loss order should be set in a logical place. Breakout of such spot will negate the reason for opening the position. Level near the opening price will be the better position because the risk will be limited.
Defensive order for the consolidation breakout transactions.There are two places where orders can be set after breakout from the consolidation. Position is open by orders BUY STOP or SELL STOP and SL should be set in the middle of the previous consolidation or at the opposite ends of consolidation.
ATR (Average True Range - average move of asset at a specified time interval) - SL is set as 2-times or 3-times ATR.
Margin Call– account deposit equals the sum that trader can lose. The deposited amount should represent only 2-3% of the total capital.
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