When Is the Right Time to Cut Loss?

In foreign exchange trading, it doesn't matter how good our analysis is. There is still room for damage. Whether nominal damage is normal or even smaller, and floating damage should be dealt with. Current traders have their own rules. Let's start with the people who don't want to take their SL or the people who are intensely averaging so that they can turn the situation from a fast floating loss to a floating profit. We have to consider whether to let it go or try to average that it is safe enough and could benefit us in the future. We cannot answer this question directly, because the movement of the foreign exchange market has been extraordinary from the beginning. We should try to make the whole thing safe by setting at least one stop loss or possibly minimizing the damage first because we don't think the situation can be changed.

1. Support or Resistance

In this area of potential support or resistance, the movement of the trend will stop here and the current trend will reverse. But what we need to pay attention to is when the trend of continuity is very strong. Even easily destroy the support area. Or resistance can be a serious problem, especially for those who have not yet completed the floating dependence, so when the market can enter this important area, it is better to reduce losses. To try Because if we don't do it now, there will be more and more uncontrollable damage.

2. The Specified point

The easiest way to reduce losses or stop loss is to calculate pips which is very simple. We try not to lose more than 70 pips as the market moves forward. The limit we have set is that it will be good. If we can reduce our losses as soon as possible so that our losses do not increase because there is no guarantee that the market will turn around and give us a profit. It would be great if we could try to cut enough.

From the above two points, we will explain what is one of the reasons why many traders reduce their losses themselves. It can be safer and more comfortable than normal cutting losses if we try to take advantage of the stop loss feature just because of this feature. The movement that follows will continue so that whatever we do will be safe. And the damage can be done from the beginning. In this way, we can anticipate large unforeseen movements.

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