Part I. Why Do We Need Stop-Loss Orders? Commander in Pips: Once we already have discussed different order types, and also we’ve said a bit about stop-loss orders. But in this current chapter we will not just discuss why we need stop loss orders, but also take a look at different techniques for how to place them. Pipruit: That will be invaluable information, I suppose. Sometimes I also feel a lack of confidence by choosing an area where to place it. Commander in Pips: Nevertheless, I want to say in advance, that there is no one simple rule of thumb of how to place them, but our discussion will probably help you to catch some ideas that will be useful in practical work. First of all – why we need stop-loss orders at all? Right from beginning we have to understand that we do not rule and control the market. Although you might say that this is obvious and it looks like we understand it – we often behave in the opposite way. In fact, every day is a challenge for traders – rumors, news, emergencies, global politics and fundamentals could drive the market fast and furious, and each trader’s ship should survive in this awful market flow, as long as it possible. As a conclusion we have to understand that every day we can take positions in the wrong direction. This will be unwelcome and unfortunately for us but these sort of losing trades are part of this business. Since not we rule the market. Hence this is a common and natural but not outstanding event and we have to be prepared for that scenario.