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. See our updated Privacy Policy here.

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
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
Oil - US Crude
Bearish
Wall Street
Mixed
Gold
Bearish
GBP/USD
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
USD/JPY
Bullish
More View more
The Placing of a Stop

The Placing of a Stop

Richard Krivo, Trading Instructor

Student’s Question:Where should I place the stop order? The high of the wick seems too much? Instructor’s Response:In this example we would want to place our stop just above the top of the long wick noted and enter the trade on the open of the next candle. The rationale for the stop placement is that if price action trades above the level of that long wick, the previous high of the retracement, market sentiment on the pair has changed from bearish to bullish and a short position is no longer prudent.

Another entry strategy on this pair would be to drill down to a 1 hour or a 4 hour chart to see if an entry in the direction of the trend on a shorter time frame would work. Stops will not necessarily be as deep on the shorter time frames. Keep in mind that whatever chart is used for stop placement, a stop should not be placed at such a point that, if triggered, more than 5% of the trading account would be lost.Also, the pair is in a downtrend on this historical Daily chart of the EURUSD, the RSI is showing bearish momentum, and there is a long wick. As such, this would be a higher probability entry.

The_Placing_of_a_Stop_body_24410d1234139570-post-day-chart-2-08-09.png, The Placing of a Stop

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

DISCLOSURES