Forex stop loss is a term used to define the minimum price limit needed to minimize losses. Therefore, when the price reaches this figure, the position will be closed automatically. However, not all traders use this feature.
It all depends on how you trade and the strategy you set from the start. Some traders believe that a stop loss is a sign that they have given up and accepted the loss. For example, trading with a value of IDR 100,000. Next, set the stop loss to IDR 70,000.
When the price fluctuation reaches 70,000, the system will automatically stop trading activity. So you lose 30,000 rupiah. For beginners, this strategy is actually very effective. However, there is a risk of harm and you may regret it. When this feature is activated and broken down into numbers as needed. Not long after, there was a price fluctuation until it reached Rp. 110,000. It takes less than a minute. This is the weakness of implementing this strategy. Therefore, some traders rarely use it.
How to Determine Forex Stop Loss
In trading, you can't just set a stop loss position. This can result in even greater losses. More detailed calculations are required. Similarly, look at the margin calls made by the broker. Before starting, brokerage firms usually provide provisions for this feature.
The value also varies from 20% to 60%, but at least the trader's capital does not run out quickly. For beginners, this poses a high risk. However, it is very useful for managing finances and subsequent strategies. With the remaining capital, you can at least make the next transaction when you open a position.
How to determine the next forex stop loss with the concept of financial management. Here, we must stop before the capital is completely exhausted. The concept of the calculation is similar to the margin call given by the broker. However, you can calculate it yourself using the loss tolerance of your trading plan.
For example, opening a position of IDR 100,000. Then set the loss tolerance to 5%. Therefore, this feature can be placed by dividing the capital formula by the loss tolerance minus 2%. So you can install it at the point of Rp3000.
This 2% figure comes from the tolerance of the remaining capital in the event of a loss. For the formula itself is actually a lot, can be developed. Finally, use fundamental and technical analysis. These two things are very important because they can predict ongoing price fluctuations.
How to Turn Stop Loss into Profit
Some attempts to use this feature are annoying, perhaps because they are profitable in just a few minutes. Therefore, activating the trailing stop feature would not hurt. This facility has the ability to activate closures for ongoing transactions. You can specify it by number.
Please note that trailing stops can only be activated if you are trading and in an open position. Then go to the order page, right click and select the stop menu at the end. Set the distance you want yourself. That's all, there are conditions from the broker that you must fulfill.
Here, the content should not be below the limit set by the broker. To confirm, open the trailing stop menu and the number will be written automatically. For example, for the number 50, the trader needs to change it to a minimum of 55 or higher. You can't do it below that. when run, this feature will be activated at level 170,000. When the price drops to 70,000, the system does not close automatically. After that, it fluctuated until it reached 200,000, and then returned to the 170,000 level. It is at this level that the stop loss occurs. You can get a profit of around 1000 rupiah. Therefore, this feature can maximize profits even if they are small. Interestingly, the trailing stop is always available. The price is still 70,001 units. You can continue to enable this feature.
To understand this technique, you need a broker you can trust and provide demo access according to actual transactions. Therefore, you need to find the best Forex broker, salmamarket Forex broker. A brokerage company that has been in the trading world for a long time.