Setting a stop loss for foreign exchange transactions is a problem repeatedly mentioned by all traders, because the foreign exchange margin itself has magnified the profit and loss generated by the transaction under the huge leverage, and the sudden risk in the market is never predictable , And this kind of sudden risk is not foreseen in advance, if you let the order be profit or loss, a sudden wrong judgment will cause a huge blow to your account, and let you in a long period of time It is impossible to return to the original principal, and setting a stop loss in each transaction plays a crucial role. The setting of a stop loss refers to what must be done in each transaction.
At the same time, it is also a combination of science and art. Many traders forget to set a stop loss, or because the previous stop loss setting is unreasonable, the original profit that can be obtained becomes a loss, or even because the stop loss makes themselves out of the market before dawn In fact, these are all because you are caught in the wrong mindset of setting stop loss.
Let me explain to you what are the wrong thinking misunderstandings in the stop loss setting. I hope you can get some thoughts and changes from it.
The first misunderstanding is to use a fixed stop loss. Many traders try to trade short-term or medium-to-long-term trading within a day, and generally set a fixed point based on the reference of others.
For example, a 30-point or 50-point stop loss may be set for intraday trading, and a 200-point or 300-point stop loss may be set for medium and long-term trading. This setting is very unscientific, because the purpose of stop loss is to To prevent market corrections and rebounds from being hit by the market, such a fixed stop loss can easily be swept out of an inappropriate range, and then the trend may continue to move in the original direction.
The second misunderstanding. If you set an excessively large stop loss, the number of points that the market fluctuates within a day has a rough range, and if you set the stop loss beyond the intraday fluctuation range, the stop loss is too large and it is meaningless.
The third stop loss misunderstanding is the form stop loss method. This method is based on a direct manual stop loss after a special reversal pattern occurs. The biggest misunderstanding of this stop loss method is that it is deceived by false signals to exit the market early.