Expert FOREX trader always use the stop loss

All forex traders or at least most of them, in my opinion, have some minor ego issues. Each trader will enter a trade without blinking twice, but when it comes to determining when he should execute the deal for profit or in purpose to cut loses, they’re having a problem. Every trader should know when to place their “stop loss” without hesitations. There are a few common methods of choosing where to place the stop loss order such as Fibonacci and Support and resistance

If you choose to define your stop loss level by using the support or resistance system, you should first decide to go long or short. If you choose long you should place your stop beneath the closer support point. If you decide to go short you should place you order higher than the closet resistance level.

Forex traders who prefer the Fibonacci system for placing the stop-loss need to initially calculate the move. For example if the EUR/USD moved from 116.84 to 118.51, meaning we have three retracing levels at 117.87 (38.2%), 117.67 (50%) and 117.48 (61.8%). According to this example you have entered the trade at 117.80 and your stop loss should be at 118.45.

There are many more methods that can help you decide where to place your stop-loss, but these are the two of the most common. While trading the forex you can use more than one system for placing the stop-loss order. Only by testing all the different systems in different situations you’ll know which one fits and when. I recommended testing those methods in a demo account first, tolerance is worth money.