InstaForex

Wednesday, September 22, 2010

9. Stoploss - Part III

Stoploss itself is design to be hit.Please understand that and put it in our mind.
It is our saviour and our friends in difficult time,especially in extreme market situation.
Trust me,the big moves will occurs every month.And at that time,nothing can stop it from crushing
your position if you're against it.If your position is in the market direction,you will make big money.
So,the smartest thing to do if you're against it is to liquidate the post and runaway,then live another
day.At least we still have some money on the table to trade tommorow.

If we are trying to fight the market moves,surely we don't have enough resources to do it.The market"monster"
will surely crushed you to death.If you have enough resources,you're free to fight the market and
I wish you good luck.

The stoploss supposedly not easily being hit.It is being position,such that if it is triggered because our
position is actually already against the market direction and to save us from further loss.
The other function of it is for risk player.Timing to enter the market at lowest possible risk value
just to get the most profit out of it.This usually happen at swing point,strong support and resistance and
breakout.If the timing is correct,we can put small stoploss to the ratio of very big gain 5 to 6 times of
the risk without being hit.Using this,even if our stoploss being hit,we just lost small margin without
any regret.And we are back in hunting again,wait and wait to make our best shot.

Believe me,out of 10 position if 4 is ruled out by SL and the other 6 is hitting take profit,
you still make decent profit overall because using this method the risk/reward is still big.
In simple word,your loss is still small incompare to profit gain.
As a small individual forex trader, I love to implement this second option and comfortable just to be a
guerilla and waiting to make an ambush and get rewards.

"If you can't kill a bear because of it strength,use the bear strength to kill it"

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