What is the Popular stop-loss Forex trading strategies?
What is the Popular stop-loss Forex trading strategies?

What is the Popular stop-loss Forex trading strategies?

In order to protect your initial capital from a bad trade you need to use a stop loss. It is the simplest, most efficient and most common way of risk management in Forex. Yet it can be very devastating when used improperly because if placed too tight or used without confirmation, it may cause a complete loss of your investment! Thus, it is crucial to understand the basics of stop-losses and the available variations so you can maximize your profits and minimize your risks.

Popular Forex stop-loss strategies include

1) Fixed Stop Loss - This type of a stop loss does not allow for a change in position once opened, no matter what happens during that particular trade. The risk is always the same and cannot be adjusted, so it can most often lead to a complete loss if the market moves against you.

2) Trailing Stop Loss - this type of stop-loss strategy allows an already existing position to fluctuate with the market movement after opened, while protecting profits at all times. This, of course, does not protect you from a sudden market crash

3) Key Level Stop Loss - this type of stop loss uses price action key levels to trigger the move. Thus it is best to use with an active or breakout strategy because if you are trading range bound currencies it may not be very helpful. Additionally, this method requires prior knowledge of support and resistance key levels in order to be effective.

4) Volatility Stop Loss - this is the best way to protect your capital because it allows you to adjust risk according to volatility changes, thus protecting profits when there's low volatility and allowing you to increase with high volatility.

5) Fixed Percentage Stop - this allows you to set the stop loss based on a percentage of the overall investment. It is best used with high-volatility currencies, where prices fluctuate often by up to 200 pips or more per day.

6) Range Stop Loss - this method simply protects profits after you are in the trade according to your entry point. For example, you get into a trade with GBP/USD using the support of 1.4500 level. When the price hits resistance at 1.4800, your stop loss is automatically set to break even because it is basically protecting profits based on the entry point only.

7) Confirmation Stop Loss - this strategy simply protects your position after you've confirmed the direction of the trade. It is best used on breakouts and with price action traders, who look for confirmation of a trend before entering a trade.

Recent Comments

Write a Comment

Related Bonus

NordFX Super Lottery: 54 More Winners Ge
NordFX Super Lottery: 54 More Winners Ge
07 October 2022 08:18 AM
Forex No Deposit Bonus 100 USD Dollar
Forex No Deposit Bonus 100 USD Dollar
06 October 2022 10:16 PM
Win Free Gives Away 100,000 USD to Trade
Win Free Gives Away 100,000 USD to Trade
06 October 2022 10:05 AM
VT Markets Bags 4 Awards From World Busi
VT Markets Bags 4 Awards From World Busi
06 October 2022 06:54 AM
HFM 30 Dollar New No Deposit Bonus
HFM 30 Dollar New No Deposit Bonus
05 October 2022 08:27 PM
ZES Forex 100% First Deposit Welcome Bon
ZES Forex 100% First Deposit Welcome Bon
05 October 2022 12:54 AM
Squared Financial $30 No Deposit Trading
Squared Financial $30 No Deposit Trading
04 October 2022 03:38 PM
HF Markets $35 Forex No Deposit Bonus
HF Markets $35 Forex No Deposit Bonus
03 October 2022 10:06 PM
JustForex 120% Free Welcome Bonus
JustForex 120% Free Welcome Bonus
03 October 2022 02:38 PM
JustMarkets 120% forex bonus on your dep
JustMarkets 120% forex bonus on your dep
03 October 2022 12:39 PM
HotForex Monthly Demo Contest Program
HotForex Monthly Demo Contest Program
02 October 2022 02:58 PM

Forex Featured Brokers

OctaFX

Free Trading Signals, Broker Type : STP/ECN Leverage up to 1:1000, 50% Deposit Bonus

Start Trading View Profile »
FXChoice

65% Crypto Bonus, Min: Deposit: 100 USD, Broker Type: STP/NDD, 50% Welcome Bonus

Start Trading View Profile »
HF Markets

Minimum Deposit $5, Leverage up to 1:1000 Broker: STP/ECN/NDD, 100% Trading Bonus

Start Trading View Profile »
INFINOX

Minimum Deposit $100, Leverage up to 1:1000, Broker Type: ECN/STP, Free Trading Signals

Start Trading View Profile »
FXTRADING.com

50% Trading Bonus, Broker Type: STP/ECN, Leverage up to 1:500, $600 Welcome Bonus

Start Trading View Profile »
ATFX

Leverage up to 1:400, Minimum Deposit $100, Broker Type: NDD, 50% Deposit Bonus

Start Trading View Profile »
Forex No Deposit Bonus 100 USD Dollar
Forex No Deposit Bonus 100 USD Dollar
07 October 2022 10:41 AM
HFM 30 Dollar New No Deposit Bonus
HFM 30 Dollar New No Deposit Bonus
07 October 2022 11:39 AM
HF Markets $35 Forex No Deposit Bonus
HF Markets $35 Forex No Deposit Bonus
07 October 2022 10:17 AM
JustForex 120% Free Welcome Bonus
JustForex 120% Free Welcome Bonus
06 October 2022 05:42 PM
HotForex Monthly Demo Contest Program
HotForex Monthly Demo Contest Program
07 October 2022 11:46 AM
Awex 50 USD Forex No Deposit Bonus
Awex 50 USD Forex No Deposit Bonus
07 October 2022 11:24 AM
Weekly Forex Forecast 3 - 7 October 2022
Weekly Forex Forecast 3 - 7 October 2022
07 October 2022 12:37 AM
NordFX Super Lottery, 100,000 Fund
NordFX Super Lottery, 100,000 Fund
07 October 2022 06:06 AM


moneta_footer.png
Best MT4 Broker
with lowest cost
Exclusive Access to
PRO Trader Tools
Free Trading
Signals
25% Rescue
Bonus New
Zero Swap Fees
on Gold