Stop Loss Is Your Insurance Policy
Trading forex without a stop loss is like driving without a seatbelt. A correct stop loss protects your capital and defines exactly how much you risk before entering any trade.
The Most Common Mistake: Fixed-Value Stop Loss
"I will put 50 pips stop on every trade" — this is a serious technical error. The stop must be placed where the market will invalidate your analysis, not where you want to limit the loss.
Technical Stop Loss: The Correct Approach
- Below support for buy trades
- Above resistance for sell trades
- Beyond the signal candle high/low in price action setups
- Beyond the swing low/high in market structure
Adjusting Lot Size to the Technical Stop
After defining the technical stop, calculate lot size based on maximum risk. If the stop is 80 pips and you accept 1% risk, adjust the lot so 80 pips = 1% of capital. Never reduce the stop to fit the lot you want to trade.
Logging Your Stops and Learning from Them
With ForexTracker, you can filter trades where the stop was hit — revealing whether you are placing stops in suboptimal locations and enabling strategy adjustments.
Analyze your stops and improve your execution. Access app.forextracker.com.br.