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  • Heads Up:🇧🇷 Interest Rate Decision due at 22:00 GMT (15min) Actual: 6.25% Expected: 6.25% Previous: 5.25% https://www.dailyfx.com/economic-calendar#2021-09-22
  • But ,how do you really feel? https://t.co/FCf3idzUOH
  • Central Bank of Brazil sees an additional 100 bps rate hike in October - BBG
  • Brazilian Central Bank hikes 100bps as expected. We have to split hairs for 'hawkish/dovish' in the Fed's views. Pretty straightforward here...
  • Central Bank of Brazil: - Raises Selic rate by 100 basis points to 6.25% - BBG
  • ARKK Innovation (ARKK), the EFT created by Cathie Wood that epitomizes disruptive growth investing, has trended downwards since Sept. 7 after failing to clear resistance in the 126.50 area. Get your market update from @DColmanFX here:https://t.co/TIcfOdpmpu https://t.co/RhPa39Dygw
  • Speaking of monetary policy changes, the Brazilian central bank is due to announce its updated policies and the economist consensus is for a 100bp hike to 6.25%. Keep an eye on $USDBRL. Scenario with the most market-moving potential in my book would be a hold and USDBRL rally
  • The implied rate hikes from the Fed through the end of next year (Dec 2022 vs current Fed Fund futures contracts) jumped after today's FOMC report. Goes a long way towards explaining the $DXY Dollar jump here https://t.co/bHP0L76B71
  • Heads Up:🇧🇷 Interest Rate Decision due at 21:00 GMT (15min) Expected: 6.25% Previous: 5.25% https://www.dailyfx.com/economic-calendar#2021-09-22
  • The corrective pullback still seems to be in play but the drop below 109.00 has been in the works for too long now, which is a sign of concern for bears. Get your $USDJPY market update from @HathornSabin here:https://t.co/ISlf6DwISE https://t.co/mSqszlVolI
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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