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  1. #11
    Junior Trader
    Join Date
    May 2018
    Posts
    4
    Post Thanks / Like
    Credits
    29
    My Language
    English
    actually sl and tp both are good we all know but this is not like we can use and can earn, sl and tp also can be some time bad for us as well, like if we have small capital and we think we can limit loss with sl so its not right, if we use very small sl every time we can lose? every time our sl can hit so this is not right, if we use very big sl so it can happen we lose more and its hard to recover, so sl and tp should be normal and based on reality

  2. #12
    Junior Trader
    Join Date
    Oct 2018
    Posts
    5
    Post Thanks / Like
    Credits
    49
    My Language
    English
    I think that stop loss is much more important than take profit. Stop loss is an element of any risk management system and it is necessary to keep risk-reward ratio in accordance with the plan and strategy rules. Proper risk-reward ratio allows trader to stay profitable even having less than 50% win rate. Trader has to apply the same risk for each trade, and stop loss is the best tool for it (sometimes it is the only way to keep it). Some of the traders use stop orders in a wrong way. If they will place stop loss to close, they would be stopped out even by a short unfavourable movement while if the stop would be too wide it would not serve its initial purpose. That is why it is very important to define stop size according to the particluar strategy used and adjust it from time to time depending on current market volatility. By the way, stop loss size is an important element of position size calculation. The best solution would be to calculate position size each time depending on risk per trade and actual stop size based on technical situation. As usual, such stop would be placed near the important price level or above/below of the certain price pattert (like triangle or trendline).
    Take profit order could be also useful sometimes, but this tool is controversial. There is an old trading proverb saying: "Cut the losses quick, let the profit run". In such case stop loss realy helps to cut the losses quick, while take profit reduces profit potential. For example, ona can close the winning position when it reaches 1:3 profit level while the same position could bring higher profit. At the same time, there could be situations when pre-defined take profit would be useful - for instance, in specific strategy with limited profit potential (like the strategies based on the principle of movement inside the range).
    Another interesting tool that combines advantages of both tools mentioned above is trailing stop. It works great when you have to leave your position without attention (for example, if you have no technical possibility to manage it due to some technical issues).
    Last edited by J_C_Anderson; 08-07-2019 at 11:58 AM.

  3. ARIONFORXtarder
 

 
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