Stop Losses- how do you use them - and why do prices Spike ?

[iMusingKiMi]

By the way, you should learn better what the meaning of the words "Kurtosis" because some spikes or even real body are useless to look more into it and it means nothing. That's why I said not putting all stop loss just above the last swing or below last swing works well. Why I said so? "Kurtosis" could explain well.

 

[HotIce]

Forgot to explain why Spikes happen. I think this is good explanation.

You are selling Banana. Trader A and Trader B selling Banana as well. If you wanna increase your sales, what will you do when Trader A offer USD 1 and Trader B offer USD 0.95? Of course you wanna pitch USD 0.90 to buyer, don't you? But the last buyer comes in and buy from Trader B pitch before yours, hence your price will become a spikes in chart.

Interesting example this I mean I never thought that way. I am learning a lot from this example site FPA…. Generally I use stop loss without a major analysis or research. I basically use it at certain levels like if I open a Eur/Jpy trade and the price is at 136.10 and I open a buy order so now I set my stop loss at 135.95 and leave the trade open in hope of collecting at least 25-30 pips in risk of losing 15 pips.

 

[Kokomaster]

Stop loss is very important in my trade and I make sure I used it often to help myself in reducing the amount of loss I could face in this busiess. We use them to limit the risk we can face here why increasing our chances to gain more money.

 

[iMusingKiMi]

Interesting example this I mean I never thought that way. I am learning a lot from this example site FPA…. Generally I use stop loss without a major analysis or research. I basically use it at certain levels like if I open a Eur/Jpy trade and the price is at 136.10 and I open a buy order so now I set my stop loss at 135.95 and leave the trade open in hope of collecting at least 25-30 pips in risk of losing 15 pips.

Not only you. Even myself start trading with a thought that find a broker, open a demo, entry, TP and SL, go Live, burnt account. This is the cycle most trader went through, and I believe a lot of trader out there still running this cycle. I can assure you this cycle will not success in Trading because you need more education than you thought.

 

[Copper]

There was a great video I watched from Jarratt Davis on explaining who was spiking price who it befitted. I had thought it the the brokers until I watched his video. Hope this helps

 

[nahiyar]

I normally use stop loss in last 2 weeks of a month. In first week there are many news and these results in spikes. So it is better to trade without a stop loss in these days and close manually.

 

[Kokomaster]

I normally use stop loss in last 2 weeks of a month. In first week there are many news and these results in spikes. So it is better to trade without a stop loss in these days and close manually.

Yeah many trading news result to spike but sometimes it's good we use stop loss in those times we are expecting news because if you don't use them you may take more risk you cant be able to bear for yourself. Anyway I use stop loss and its been a great way for me to manage my losses.

 

[NicholasM]

Yeah many trading news result to spike but sometimes it's good we use stop loss in those times we are expecting news because if you don't use them you may take more risk you cant be able to bear for yourself. Anyway I use stop loss and its been a great way for me to manage my losses.

It is good to use stop loss, but sometimes during news items it can get very tricky. I have seen situations where it would have been better not using stop loss during news items for the simple reason that price gaps can be hurting. When a price gap occurs, the stop loss will be triggered at the next lowest price and that could be several pips from where you initially placed it resulting into a realization of a huge loss. On the contrary, if no stop loss is used, the trade won't close and thus will remain open. This gives it a chance to recover after the market noise fades off in a couple of days.

 

[EURUSD]

Stop Loss is normally used as risk management strategy with function to limit maximum amount of loss in single transaction. There is no fixed rule to place stop loss correctly because different trader will be different point of view to place it. There are traders who prefer to set fixed stop loss and some other prefer to set dynamic stop loss as it needs. Stop Loss is useful to prevent big losses in short time when there is spike movement which is caused by high impact news.

 

[kemer roach]

I always use stop loss trading tool for my capital security. In addition, I like to set my SL around strong support level and resistant level. I know, if a set my stop loss without my analysis then I have to face my stop loss. This is way, I always set it according to my analysis.