Three Stop Loss Rules for Every Trader

Stop losses are an essential part of any risk management system because they help traders resist trading on emotions. Whenever you open a trade, you should always set a stop loss. If you stick to your plan and don’t move them, you’ll find you won’t ever let your losses run too long. Remember these rules:

1. A stop loss should be considered and decided before a position is entered.
2. A stop loss should be placed immediately at the time of entry.
3. A stop loss amount should not allow more than a 2% loss of your account balance—for day trades and scalp trades, a stop loss should not allow more than 1% loss of account balance.

Remember these rules and implement them! Good luck and happy trading!

 

Did you find this post helpful? Try taking a look at Apiary’s glossary!

About Tom

Tom Lund is the Content Manager at Apiary Fund where he began his career in 2012. He creates and edits the educational material that Apiary Fund uses to train new foreign exchange traders. Lund researches and writes the investing news and tips for the Apiary Fund blog and website. He graduated from Brigham Young University-Idaho with a bachelor’s degree in English.

Like this Article?

Check out our newsletter for regular forex trading tips and advice!

Or you can visit our website to see what our unique business model is all about ...and how you can participate!

, , ,

Comments are closed.