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  • Airline stocks retracing losses, some already in positive territory, despite the large sell-off in the market. News that the US will overhaul its COVID-19 travel rules and lift some restrictions are good news for the airline industry $JETS $UAL $AAL $ALK
  • The S&P 500 have taken a clear dive to start the week and fear of full risk aversion is gaining traction. DailyFX's @JohnKicklighter discusses what to expect in the markets this week! https://t.co/Mlyp5Tbdax
  • $USD still pulling back from resistance. 93.43 was the Q1 swing high, still playing a role in $DXY support potential around prior res, ~93.20 https://t.co/3TnlEu0yZX https://t.co/ub8o4D8NhW
  • despite the theatrics elsewhere, $Gold has held last week's low through this week's open, at least so far even getting a bump higher. resistance potential 1769-1775 $GC $GLD https://t.co/4mbBa8Yzhu
  • While there is no doubt a risk aversion wave at play now, it can still burn itself out with years of complacency and the expectations of Fed on Wed (anticipation can take the wind out of sails). But if/when the Dollar takes off pre-FOMC, that would be. https://t.co/3qFNBQEEA3
  • Bitcoin probing Fibo support zone ~42,588 #Bitcoin $BTCUSD https://t.co/f5XeSk5VDY https://t.co/zKDRps62Id
  • EUR/USD extends the series of lower highs and lows from the previous week as European Central Bank (ECB) officials defend the dovish forward guidance for monetary policy. Get your $EURUSD market update from @DavidJSong here:https://t.co/4dgXe9lMik https://t.co/5CkSsQKawh
  • There are reasonable disputes over where technical boundaries exist from people with different views, charts, time frames, etc. I think this $SPX gap down and drive below the 50-day SMA clearly qualifies as a break https://t.co/M15HsOyvoG
  • Some people like a quiet market that edges higher consistently day in and day out. I am not one of those people. I like volatility
  • 🇺🇸 NAHB Housing Market Index (SEP) Actual: 76 Expected: 74 Previous: 75 https://www.dailyfx.com/economic-calendar#2021-09-20
Never Trade Without a Protective Stop

Never Trade Without a Protective Stop

Thomas Long, Course Instructor

The difference between the entry and the protective stop 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 down 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 currency 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.  A losing trade does not mean the trader does not know how to trade and is not something we 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.

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