News & Analysis at your fingertips.

We use a range of cookies to give you the best possible browsing experience. By continuing to use this website, you agree to our use of cookies.
You can learn more about our cookie policy here, or by following the link at the bottom of any page on our site.

0

Notifications

Notifications below are based on filters which can be adjusted via Economic and Webinar Calendar pages.

Live Webinar

Live Webinar Events

0

Economic Calendar

Economic Calendar Events

0
Free Trading Guides
Subscribe
Please try again
EUR/USD
Bearish
Oil - US Crude
Mixed
Wall Street
Mixed
Low
High
of clients are net long.
of clients are net short.
Long Short

Note: Low and High figures are for the trading day.

Data provided by
Gold
Mixed
GBP/USD
Bearish
USD/JPY
Bullish
More View more
Real Time News
  • IG Client Sentiment Update: Our data shows the vast majority of traders in Ripple are long at 94.64%, while traders in EUR/USD are at opposite extremes with 73.15%. See the summary chart below and full details and charts on DailyFX: https://www.dailyfx.com/sentiment https://t.co/qf5YETWpSO
  • The #USD technical outlook against #ASEAN FX remains broadly bearish, check out my latest update here - https://www.dailyfx.com/forex/technical/article/special_report/2020/12/03/US-Dollar-May-Stiill-Struggle-USDSGD-USDIDR-USDMYR-USDPHP.html?CHID=9&QPID=917702&utm_source=Twitter&utm_medium=Dubrovsky&utm_campaign=twr https://t.co/Uluv7XsimX
  • $EURUSD is currently facing down the midpoint of the 2014-2017 range and its historical range around 1.2125/50. How robust is this move? Is it more a Dollar slide or a Euro rally? I discuss that today: https://www.dailyfx.com/forex/video/daily_news_report/2020/12/03/EURUSD-Continued-Climb-to-Over-Two-Year-High-May-be-More-of-a-Euro-Move-than-Dollar.html?ref-author=Kicklighter&QPID=917719&CHID=9 https://t.co/kas6ea1ShA
  • Forex Update: As of 05:00, these are your best and worst performers based on the London trading schedule: 🇬🇧GBP: 0.13% 🇨🇭CHF: 0.08% 🇪🇺EUR: 0.02% 🇨🇦CAD: -0.07% 🇳🇿NZD: -0.10% 🇦🇺AUD: -0.11% View the performance of all markets via https://www.dailyfx.com/forex-rates#currencies https://t.co/P2eGs7wOLQ
  • Indices Update: As of 05:00, these are your best and worst performers based on the London trading schedule: France 40: -0.10% Wall Street: -0.14% US 500: -0.15% Germany 30: -0.23% FTSE 100: -0.37% View the performance of all markets via https://www.dailyfx.com/forex-rates#indices https://t.co/UTmuwSgVa6
  • Mayor of Los Angeles says the city is near 'devastating' tipping point following announcement of city wide stay-at-home order $DXY $SPX
  • Mayor of Los Angeles orders a stay-at-home order amid rising Covid cases $DXY $SPX
  • The dispute between the Federal Reserve and the Treasury Department concerned economists and government officials last week. Traders, however, appeared unfazed as U.S. equity markets proceeded to higher ground. Get your market update from @FxWestwater here:https://t.co/DKK7WWHKlu https://t.co/K1f9Y1h4sn
  • China official urges preparation for Covid vaccine production - Xinhua via BBG
  • Over the past seven days, $EUR has been the best performing G10 major vs the #USD with a 1.66% spot return while $GBP has been the worst at -0.11% spot return $EURUSD $GBPUSD $DXY
Never Trade Without a Protective Stop

Never Trade Without a Protective Stop

2010-04-07 14:00:00
Thomas Long, Course Instructor
Share:

The difference between your entry and your protective stop level is your risk and represents what you are willing to lose on the trade.  There is really only one guarantee in trading and that is if you trade, you will have losing trades.  How you manage those losses will have as much to do with your success or failure as a trader as any other factor.  Too many new traders use what they call a “mental stop”.  They have a price level in mind where they would consider getting out if the market moves against them, but do not enter it into the trading platform.  Typically, when the market does move to that price, instead of exiting, they “wait and see how the market will react”.  If the loss becomes larger, they then decide that they will exit when the market moves back to their original mental stop level.  As the market continues to move against them, intentions about getting out turn to hope about the market coming back before they get a margin call.  Many times, it is that margin call that determines their exit, not their own analysis. 

Sound familiar?  I hope not, but this happens more than it needs to in the world of trading.  You can avoid this by simply placing a protective stop in the market with your entry, which means you have identified and limited your loss to an amount that you have determined to be acceptable.  For instance as the chart below shows, you could sell on a move down through the previous low and place your protective buy stop above the high before the low. 

stop 040710

A losing trade does not mean that the trader does not know how to trade and is not something one can avoid by not using protective stops.  We should instead limit those losses with the use of a protective stop.  This way we can make sure we have protected our account balance with enough funds to take advantage of the next trading opportunity.  We should judge our success by the results of a series of trades, not just one trade.  Without identifying our risk and using a protective stop, we risk not having the funds to be around long enough to take advantage of a series of trading opportunities.  By using a protective stop in every trade, we can help to keep this from happening.

DailyFX provides forex news and technical analysis on the trends that influence the global currency markets.

DISCLOSURES