Is the use of Stop Loss the answer to all trading risk concerns?

Eleni Anna Branou 2016.12.10 10:24

William Roeder 2016.12.10 17:27 #1

Without a initial SL, you have basically infinite risk.	You place the stop where it needs to be - where the reason for the trade is no longer valid. E.g. trading a support bounce the stop goes below the support. Account Balance * percent/100 = RISK = OrderLots * (\|OrderOpenPrice - OrderStopLoss\| * DeltaPerLot + CommissionPerLot) (Note OOP-OSL includes the SPREAD, and DeltaPerLot is usually around $10/pip but it takes account of the exchange rates of the pair vs. your account currency.) Do NOT use TickValue by itself - DeltaPerLot You must normalize lots properly and check against min and max. You must also check FreeMargin to avoid stop out

Without a initial SL, you have basically infinite risk.

You place the stop where it needs to be - where the reason for the trade is no longer valid. E.g. trading a support bounce the stop goes below the support.
Account Balance * percent/100 = RISK = OrderLots * (|OrderOpenPrice - OrderStopLoss| * DeltaPerLot + CommissionPerLot) (Note OOP-OSL includes the SPREAD, and DeltaPerLot is usually around $10/pip but it takes account of the exchange rates of the pair vs. your account currency.)
Do NOT use TickValue by itself - DeltaPerLot
You must normalize lots properly and check against min and max.
You must also check FreeMargin to avoid stop out

Account currency to quote How to get the Calculating a trade lotsize