We have already found out that it can be quite dangerous to trade without
- Support/resistance levels are quite popular both for position entry and for exit.
Stop-losses set near such levels usually are quite safe. Unfortunately, they can be abused by institutional Forex market participants who tend to push market to support/resistance levels to catch a wave of triggeringstop-losses . - Round numbers serve as the psychological levels of support and resistance and thus are quite similar to those
stop-losses . - Fibonacci retracements offer good signals both for
profit-taking andloss-stopping . Important Fibonacci levels are .382, .5 and .618. - Set levels from the open price is a very popular type of
stop-loss in expert advisors, wherestop-loss is set to the entry level with a fixed amount of pips added or subtracted from it. Unfortunately, suchstop-loss isn’t adaptable to the current market situation. - Indicator values can serve as viable
stop-loss targets, but the quality of suchstop-loss depends on the quality of indicator. Parabolic SAR is the classical example indicator that’s perfect forstop-loss setting. - Levels based on volatility (ATR) are the most adaptable
stop-loss variant. At the same time, it’s the mostdifficult-to-use method unless you are automating your trading. Volatility basedstop-loss changes depending on the current market liquidity and ability to go for long pips. - Gann levels may be derived from Gann fan, lines or grid. Gann was a nice trader, but you actually have to believe in his theories to trade using his principle of technical analysis.
- Pivot points are popular, but too many of pivot point types exist. And the produced
stop-loss levels are based more on math than on the market situation. - Channels can be regression channels, channels built with trendlines, channels based on trading sessions, etc. Work good, if you know how to build those channels.
- Random is a way to set up your
stop-loss levels when you have no time for your regular analysis but urgently need a position with astop-loss level. Of course, you can develop a system with randomstop-losses , but how successful will it be?

If you want to share your opinion or questions regarding the best way to set your
Hi,
stop-loss is one of the best invention of the financial trading. This article really helps me a lot how to place the stop-loss orders.
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admin Reply:
April 2nd, 2011 at 9:18 am
Glad to help. What type of stop-loss do you use in trading?
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I personally prefer ATR trailing stop.
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admin Reply:
April 2nd, 2011 at 9:18 am
How do you usually apply it?
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Support/resistance level or last day closeing price is best
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yes support and resistance levels would be better..
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