This is the most important thing of Forex trading

[richardmai]

A good Stop Loss setting is the most important thing of trading system. Why ?

Let's say you have init balance 1000USD , you entry a order and lost -50% , then you left 500usd only , which mean you have to make your account increase 100% to recover to 1000USD ( 500 * 200% = 1000) .
This is harder then you lost -50% , the piont is that you should stop your lose as good as possible, the balance you lost more , the much harder you recover.

It's not saying that a small range's StopLoss setting is the best, if the stop loss level set to too small, your position will be easily hit by the market move , especially when the data/news come out.

So, how to set the best stop loss level ? There're some base ideas:
1. use recent Support level or Resistance level
2. By Boll band up/down edges.
3. By trading volume peak
4. By AI model (we will show next article how to)

 

[CallahanSinclair]

Because it helps you manage risk and protect your capital by automatically exiting a losing position before the losses become too large. It enforces discipline and helps traders stick to their trading plan, preventing emotional decision-making that can lead to bigger losses.