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The importance of proper stop loss placement

Anne

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One of the first things we traders learn is how to place a stop loss. An effective stop loss strategy helps stop the proverbial bleeding when market direction turns against you, cutting into your account balance.
The idea of placing a stop loss is pretty simple but choosing the right place to set a stop loss can get challenging. On one hand, it is a matter of picking a price level beyond which a trade bias is no longer valid.
On the other hand, depending on the complexity of your trading approach, you may need to integrate it into your trades from a more strategic level (especially if you are unloading partial positions or if you are trading multiple markets at once).
 
One of the first things we traders learn is how to place a stop loss. An effective stop loss strategy helps stop the proverbial bleeding when market direction turns against you, cutting into your account balance.
The idea of placing a stop loss is pretty simple but choosing the right place to set a stop loss can get challenging. On one hand, it is a matter of picking a price level beyond which a trade bias is no longer valid.
On the other hand, depending on the complexity of your trading approach, you may need to integrate it into your trades from a more strategic level (especially if you are unloading partial positions or if you are trading multiple markets at once).
Thank you for this very useful information!
 

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