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Chapter 35, Part IV. Other Thoughts on Stop-Loss Orders. Page 3

Discussion in 'Complete Trading Education- Forex Military School' started by Sive Morten, Dec 28, 2013.

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  1. Sive Morten

    Sive Morten Special Consultant to the FPA

    Aug 28, 2009
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    5. Predetermine and place stop-loss orders simultaneously with entering the trade by applying limit order with your software. Some very experienced traders apply manual stop-loss orders. They do not place them initially and keep this level in mind. If the market hits this level – they analyze the way how it does it and then close their position. So, we are not them and do not have such experience and hard rock discipline. For newbie traders we highly do not recommend such approach to stop-loss orders. No manual stop-loss orders! Place stop-loss order in advance of any trade.

    6. Do not ever cancel your stop-order when a trade in progress or widen it by hoping that the market is at the edge of reversal. This leads to breaking of your trading plan and should be treated as a mistake. When you are in the rush, smoke and fire of financial battle you can’t think reasonably. It is strongly forbidden to widen or to cancel your stop-loss order that you’ve placed based on your predetermined trading plan.

    If your stops are not correctly matched with invalidation levels – this is a problem of your trading system and you may fix it later in a calm situation or develop a new technique of stop placement. But since you apply any technique of stop-loss placement in current trade ahead of it – follow it strictly.

    7. Trail your stop as soon as possible by your trading system. Protect your profit. Your task is to make profit in every trade according to your trading plan, not to get in Guinness World Records with greatest pips ever caught in single trade. Move your stop higher as the market starts to move in your favor. When we’ve spoken about harmonic patterns – there are a lot of examples how to do it. Apply moving stop to breakeven.

    P.S. This lesson was written by Sive Morten, who has been working for a large European Bank since April of 2000, and is currently a supervisor of the bank's risk assessment department. Sive's knowledge of forex market and banking industry is vast and quite complete. If you have any specific questions about forex, banking industry, or any other financial instruments, please post them on the next page an Sive should answer soon.

    Note: FPA ranks are earned in the battles against scam, not in the classroom.
    #1 Sive Morten, Dec 28, 2013
    Lasted edited by : Oct 12, 2016
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