"People say that if you want to trade, you must put a stop-loss, but why is it fun to trade in a long time at a loss? Like this, you don't have to put a stop-loss!"
Many traders out there are actually still confused about the strategy of using 'stop-loss' (SL) settings in their trading.
Sometimes when the trading position is affected by SL, it continues to create a melting account. There are also times when the price touches exactly the SL before breaking back in the direction the trader wants and they will miss out on making a profit. Have you ever had the same experience?
This article will share strategy tips to set stop-loss in a more efficient way for each of your trading positions.
#1 Do not set the stop-loss too close to the entry
The mistake that many traders, especially beginners who have just started in trading, will set the SL too close to their trading position with the reason of not wanting a big loss.
With an SL distance of only 5 to 10 pips, it is very inappropriate because it only eats the trader himself.
This technique is very disadvantageous because it is difficult for a trader to get such an accurate entry. So the trader needs to give the appropriate space for the price to move first before profit can be achieved.
#2 Don't set the stop-loss right on the SNR zone
If you already understand about support & resistance (SNR), you definitely understand where the price focus area is and this is also the right place to put your SL.
However, you are not encouraged to place it exactly on that zone because the price will test this SNR zone first before changing direction.
Ideally, set it slightly outside the zone either above the resistance (Sell position) or below the support (Buy position) to avoid the price touching your SL before continuing the movement in the direction you want and adding to your frustration.
If the price breaks through your SL, you don't need to worry anymore even if you suffer a loss because the situation is likely to be an indication for the price to change direction or trend.
#3 Never move the stop-loss you set
Traders are often afraid of facing a loss situation when the price goes against the direction of the trading position set at the beginning.
However, you need to be disciplined with your trading plan and never move the SL further when the price approaches it.
If the price has changed trend and you move the SL further, you will incur a bigger loss than you should.
Therefore, set a stop-loss with a more correct method and don't be afraid if you experience a loss when the price hits your SL because losses are a normal thing in the trading process.
