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

Discussion in 'Complete Trading Education- Forex Military School' started by Administrator, May 10, 2012.

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  1. Administrator

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    Part IV. Other Thoughts on Stop-Loss Orders. [​IMG]

    Commander in Pips: This is the final part in our discussion of stop-loss orders. In the beginning I would like to continue discussion of stop-loss orders’ features. We’ve discussed several quite different approaches to placing stop-loss orders, but all of them have another feature – time. Actually you can add this option to any type of stop loss order – technical, volatility or even cash stops. Although this option is applied not very often, it could be useful mostly for day traders and scalpers. For instance, if you usually close all your positions in some time and finish your trading session – you may place stop orders at a specific time to close your positions. Another possibility is to place stop at the ending of Friday’s trading session, if you do not want to hold it during weekend. You may apply this option to accomplish the 3-period rule that we’ve discussed previously, if you can’t monitor your position closely. So this is just an option and I want you to know about it.

    [​IMG]


    Pipruit: Interesting, but a bit specific. I suppose it will not be too often when I need this option.
    Commander in Pips: Yes, application of this feature is not quite common. Since, we’ve finished with it, let’s now turn to some framework for placing stop-loss orders.


    1. Do not place your stop-loss order too tight. Any stop-loss order should allow the market to breath. This range could be different depending on time frame. The higher the time frame – the more room is needed for that. Better to take into account market volatility, based on indicators that we’ve discussed in the previous lesson. Also thinking about stop-loss level as an invalidation point will help you much, because it’s very hard to imagine that the invalidation point of your position could be just 10 pips lower than your entry;

     
    #1 Administrator, May 10, 2012
    Lasted edited by : Oct 12, 2016
    Rehan Uddin likes this.
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